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European stocks fall amid E.Z. worries; DAX down 1.31%

Published 02/27/2012, 04:12 AM
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Investing.com - European stock markets fell on Monday, as concerns over the handling of the euro zone’s debt crisis persisted after the Group of 20 nations rebuffed European demands for more international aid.

During European morning trade, the EURO STOXX 50 tumbled 1.22%, France’s CAC 40 plummeted 1.30%, while Germany’s DAX 30 1.31%.

At the G20 summit in Mexico City over the weekend, European members were told they must come up with more financial firepower to fight the region’s debt crisis in return for more help from the rest of the world, putting pressure on Germany to drop its opposition to a bigger European bailout.

But sentiment remained supported as investors looked ahead to the European Central Bank's second liquidity operation, set to take place on Wednesday, after the bank carried out a similar successful operation in December.

Financial stocks were broadly lower as shares in French lenders BNP Paribas and Societe Generale declined 1.76% and 1.55%, while Germany’s Deutsche Bank and Commerzbank retreated 1.39% and 2.73% respectively.

Peripheral lenders also added to losses with Italian Unicredit and Intesa Sanpaolo plunging 2.41% and 2.68%, while Spain’s BBVA and Banco Santander shed 0.94% and 1.16%.

Meanwhile, Maersk saw shares slide 3.60% after the shipping company posted a 43% drop in 2011 profit as falling freight rates pushed its container line, the world’s largest, to a loss.

Airline companies were also down due to the recent rally in crude oil prices as sanctions were tightened against Iran. Deutsche Lufthansa dropped 3.21% and Air France- KLM Group lost 2.71%.

In London, FTSE 100 declined 0.79%, as U.K. lenders tracked their European counterparts lower.

Shares in Lloyds Banking tumbled 2.33% and Barclays plunged 2.19%, while the Royal Bank of Scotland and HSBC Holdings fell 1.30% and 0.77% respectively. Earlier Monday, HSBC reported full-year net income of USD16.8 billion, in line with estimates.

Elsewhere, Essar Energy tumbled 5.92% after the Indian power producer and oil refiner said it made a loss after tax of USD568.2 million in 2011 after the Supreme Court of India set aside a sales tax deferment scheme.

On the upside, Vedanta gained 1.13% after the copper producer said Sesa Goa, India’s largest iron-ore exporter, will absorb Sterlite Industries (India) in an all-share deal, helping to reduce debt following Vedanta’s USD8.67 billion purchase of oil producer Cairn India.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a fall of 0.41%, S&P 500 futures signaled a 0.49% decline, while the Nasdaq 100 futures indicated a 0.47% loss.

Later in the day, Germany’s parliament was to hold an extraordinary session to vote on Greece’s second bailout, while the U.S. was to publish industry data on pending home sales.


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