European Stocks Slump Amid Fresh Virus Fears; Banks Hit Hard


© Reuters.

By Peter Nurse

.com – European stock markets traded sharply lower Monday, weighed on by concerns over an uptick in coronavirus cases and weakness in the heavyweight banking sector on the back of disclosures about historical suspect payments

At 3:35 AM ET (0735 GMT), the DAX in Germany traded 2.2% lower, the CAC 40 in France fell 2% and the U.K.’s FTSE index was down 2.5%.

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Shares in HSBC (LON:HSBA), the largest bank in Europe by total assets, fell 3.9%, to its lowest level since 2009, after being accused of moving large sums of allegedly illicit over nearly two decades by the Financial Crimes Enforcement Network.

Standard Chartered (OTC:SCBFF) was also implicated, and it dropped 3.4%, with Europe’s banking sector, already down about 40% this year, falling sharply as a consequence.

Elsewhere, German telecom Drillisch (DE:DRIG), and its parent United Internet (DE:UTDI), slumped over 20% after it warned that an increase in the cost of its network access deal with Telefonica (NYSE:TEF) Deutschland (DE:O2Dn) would hit profits this year.

Rolls-Royce (LON:RR) dropped 10% after the engineering company warned late Friday that it was considering an equity raise of up to 2.5 billion pounds to strengthen its balance sheet.

Europe’s travel and leisure index was also hard hit: British-Airways owner IAG (LON:ICAG) dropped 11%, easyJet (LON:EZJ) 9% and Ryanair (LON:RYA) 6%, as the U.K. moves toward a second national lockdown. New restrictions in Spain and other European countries are also spreading, after the number of Covid-19 cases rose sharply in recent weeks.

Economic numbers in Europe have shown a rebound of late, enough to prompt the European to revise upwards its growth forecast for 2020 at its policy meeting earlier this month. The is reportedly set to review its bond-buying activities to give its other programs the same flexibility as the Pandemic Emergency Purchase Program, its main tool for supporting the through the pandemic.

is likely to be subdues this week ahead of updates on business confidence from the flash PMIs and the German Ifo, on Wednesday and Thursday.

Oil prices edged lower Monday despite another weather pattern emerging to threaten in the Gulf of Mexico. In what has been an active hurricane season, Tropical Storm Beta has prompted some oil producers to evacuate offshore platforms in the region, just as they had been restarting their operations in the wake of Hurricane Sally.

U.S. futures traded 1.2% lower at $40.84 a barrel, while the international benchmark contract fell 2% to $42.31.

Elsewhere, futures fell 0.4% to $1,954.60/oz, while EUR/USD traded 0.1% lower at 1.1831.




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