By Sara Sjolin, MarketWatch

Banks bear the brunt of the selloff

European stock markets dropped for a seventh straight session on Tuesday, with banks leading the charge lower as fears of a global economic slowdown persist.

The Stoxx Europe 600 index slid 0.8% to 311.81, building on a 3.5% decline on Monday (http://www.marketwatch.com/story/european-stocks-drop-to-15-month-low-2016-02-08), when it closed at the lowest level since October 2014.

Germany's DAX 30 index , which slipped into bear territory on Monday, gave up 0.5% to 8,931.01, while France's CAC 40 index dropped 0.7% to 4,036.23. The U.K.'s FTSE 100 index fell 0.1% to 5,683.14.

Richard Perry, market analyst at Hantec Markets, said there was not one specific catalyst behind the selloff, but a range of factors.

"Concerns about global growth slowing down is the usual excuse, whilst the $100 billion reduction in Chinese FX reserves is also a red warning light. However, it is just a negative swarm of bear pressure through markets that is a real concern," he said in a note.

"Equity markets are losing key levels of support, and until there is something tangible for investors to hang a positive argument on (such as signs of economic improvement, or perhaps a bullish signal on the oil price) it is difficult to see what will stop the malaise," he added.

The downbeat trading mood in Europe was also made worse by data showing an unexpected drop in German industrial production (http://www.marketwatch.com/story/german-output-exports-drop-in-december-2016-02-09) in December, another sign that Europe's largest economy ended 2015 on a weak note.

In Asia, Japan's Nikkei 225 tanked 5.4% (http://www.marketwatch.com/story/nikkei-sharply-down-on-banking-energy-woes-2016-02-08), sparked by fears of global economic weakness. China's markets are closed for the Lunar New Year holiday.

Banks: Shares of Swedbank AB (SWED-A.SK) slid 4.5% after the Swedish lender in a surprise move said it was replacing Chief Executive Michael Wolf, with immediate effect (http://www.marketwatch.com/story/swedbank-replaces-chief-executive-2016-02-09).

Other banks were also getting hit, continuing a recent slump for the sector that is fueled by concerns over the impact of low oil prices, negative interest rates and weak economic growth. The Stoxx Europe 600 Banks Index dropped 1.1%, heading for its lowest close since August 2012, according to FactSet data.

Read: Why a selloff in European banks is ominous (http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)

Banca Popolare di Milano Scarl (PMI.MI) lost 6.6%, UniCredit SpA (UCG.MI) dropped 4.9% and Banco de Sabadell SA (SAB.MC) gave up 2.7%. Credit Suisse Group AG (CSGN.VX) and UBS Group AG (UBS) each fell 4.1%.

However, shares of Svenska Handelsbanken AB jumped 4.7% after the lender said profit surged 35% (http://www.marketwatch.com/story/handelsbanken-profit-up-35-lifts-dividend-2016-02-09) in the fourth quarter.

Other movers: Shares of Pandora AS (PNDORA.KO) slumped 7%, even as the Danish jeweler raised dividends by 44% (http://www.marketwatch.com/story/pandora-ups-dividend-44-to-launch-share-buyback-2016-02-09) and launched a share buyback program.

On a more upbeat note, shares of Vestas Wind Systems AS (VWS.KO) jumped 4.5% after a well-received earnings report from the wind-turbine maker.

Invitation to investing Insights: A global markets survival guide

If you'll be in London on Tuesday, Feb. 23, you're invited to join us for an evening of cocktails and conversation on the topics of shifting monetary policy, growth, currencies, and the outlook for investing opportunities and risks in European and global markets.

Our panelists for the evening will include MarketWatch Personal Finance and Investing Columnist Robert Powell; Mark Hulbert, Editor of the Hulbert Financial Digest; and Virginie Maisonneuve, Founder and Managing Director of Maisonneuve Global Advisors.

The event is free and open to the public, but reservations are required. For more information or to RSVP for the event, please email (MarketWatchevent@wsj.com).

 

(END) Dow Jones Newswires

February 09, 2016 04:02 ET (09:02 GMT)

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