Euro stocks plunge as financials fall sharply; DAX falls 3.1%
Investing.com
Published Sep 05, 2011 05:20AM ET
During European morning trade, the EURO STOXX 50 plunged 3.2%, France’s CAC 40 sank 3.4%, while Germany’s DAX 30 tumbled 3.1%.
Concerns that the global economic recovery is losing momentum were underlined on Friday, after the Department of Labor said U.S. non-farm payrolls were unchanged last month, the weakest reading since September 2010. Economists had expected non-farm payrolls to rise by 74,000 in August.
Adding to global worries, German Chancellor Angela Merkel's ruling party was defeated in local elections on Sunday, adding to concerns over the region’s ongoing sovereign debt crisis.
Meanwhile, shares in the financial sector came under broad selling pressure after the U.S. Federal Housing Finance Agency filed lawsuits against 17 global financial institutions over the sales of mortgage-backed securities in the buildup to the 2008 financial crisis.
Among European lenders named in the lawsuit, Deutsche Bank shares plunged 7.3%, Societe Generale dropped 6.2%, while U.K. lenders Royal Bank of Scotland and Barclays saw shares tumble 7.8% and 7.5% respectively.
Shares in peripheral lenders were also lower, with Italian banking giant Unicredit falling 4.1%, rival Intesa Sanpaolo down 4.5%, while Banco Santander shares declined 4%.
Shares in Swiss chemical maker Clariant plunged 12.7% after it cut its full-year sales and profit outlook, citing a strong Swiss franc.
Elsewhere, in London, the commodity-heavy FTSE 100 dropped 2.1% as miners performed poorly, amid the uncertain global economic outlook.
Mining giants BHP Billiton and Rio Tinto saw shares drop 2.9% and 3.5% respectively, while copper producer Xstrata saw shares tumble 4.2%.
Shares in Chilean copper miner Antofagasta retreated 3.65% after Citigroup downgraded the stock to ‘hold’ from ‘buy’, saying the stock's “strong recent performance means we see better opportunities elsewhere in the sector."
Also Monday, markets in the U.S. were to remain closed for the Labor Day holiday.
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Written By: Investing.com
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