Arab Today, arab today european stocks slide
Last Updated : GMT 21:03:02
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On finance sector worries

European stocks slide

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Arab Today, arab today European stocks slide

Frankfurt's DAX 30 index was down 2.5% at 9,054.1
London - Arab Today

European stock  markets slumped on Monday, giving up initial gains, as focus switched to the banking sector following recent poor earnings and persistent worries over China's economy, analysts said.

After a quiet session across Asia owing to the Chinese New Year, Europe opened higher but indices were down almost 2.0 percent in London and nearly 3.0 percent in Frankfurt heading into the afternoon.

Focus returned to the banking sector after the spotlight having been firmly on commodity stocks in recent weeks owing to slumping oil and metals prices.

Global shares had already tumbled on Friday after US jobs data sparked worries that the Federal Reserve could decide to raise rates again as soon as March.

Concerns linger also over weak growth in the eurozone and emerging-market economies.
"European markets, after initially opening higher, have been led sharply lower by banking shares, a number of which are hitting multi-year lows," said Michael Hewson, chief market analyst at traders CMC Markets UK.

"The disappointing (recent) earnings across the sector from the big US firms to Credit Suisse and Deutsche Bank in Europe alongside the ugly spectre of negative interest rates have seen investors significantly reassess the chance of an earnings turnaround after years of regulatory fines for past misdeeds."

Among the biggest losers Monday were HSBC, whose shares were down 3.0 percent. Commerzbank shed 5.0 percent and BNP Paribas gave up 3.3 percent.

In foreign exchange meanwhile, the dollar gave up gains won thanks to an increased chance of another US rate rise this year.

Friday's latest monthly jobs report showed that US hiring eased in January but that the unemployment rate slipped to 4.9 percent and wage growth increased modestly.

Elsewhere on Monday, crude prices rebounded as talks between the oil ministers of Saudi Arabia and Venezuela on stabilising the beleaguered market raised hopes of production cuts.
"The absence of Chinese influence on these markets will be felt throughout the week," said Jeremy Cook, chief economist at currency traders World First.

Markets were said to be reacting also to weekend news that China’s foreign exchange reserves had fallen to their lowest level in more than three years, as Beijing sells dollars to stop the yuan from depreciating further.

The world’s largest currency hoard shrank by $99.5 billion in January to some $3.2 trillion, the People’s Bank of China said on its website, the lowest since May 2012.

Worries about China's economy, the world's second biggest, have pushed the yuan to a five-year low. The country saw its first-ever annual decline in foreign exchange reserves last year as Beijing tried to prevent a more drastic devaluation.

- Key figures around 1030 GMT -

London - FTSE 100: DOWN 1.8 percent at 5,744 points

Frankfurt - DAX 30: DOWN 2.5 percent at 9,054.1

Paris - CAC 40: DOWN 2.3 percent at 4,105.1

EURO STOXX 50: DOWN 2.2 percent at 2,817.5

Tokyo - Nikkei 225: UP 1.1 percent at 17,004.30 (close)

New York - Dow: DOWN 1.3 percent at 16,204.97 (close)

Euro/dollar: UP at $1.1174 from $1.1158 on Friday

Dollar/yen: DOWN at 116.75 yen from 116.86 yen
Source: AFP

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