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Europe close: Stocks walloped by lockdown worries, leak of bank files

By Alexander Bueso

Date: Monday 21 Sep 2020

Europe close: Stocks walloped by lockdown worries, leak of bank files

(Sharecast News) - European shares started the week deep in the red as fears over increasing coronavirus cases across the Continent combined with a leak of confidential reports from banks around the world to the US Treasury regarding potential money laundering to knock investor sentiment hard.
"The term 'sea of red' was invented for such days. European markets had suffered heavy losses this morning, but the situation has worsened following the US open," said IG's chief market analyst, Chris Beauchamp.

"The FTSE 100 has wiped out all its gains from early September in the space of three days, while US markets have seen losses accelerate, taking them to six-week lows. If this is the start of something bigger then we could have a long way to go before a bottom is in place - usually election years see US equities weaken from today into the end of October."

The pan-European STOXX 600 fell 3.24% to 356.82, alongside a 4.37% drop to 12,542.44, while the FTSE Mibtel was down 3.75% to 18,793.35.

The report by the Buzzfeed website and other outlets centred on the so-called "suspicious activity reports" that banks are required to regularly file with the US Treasury.

In reaction to the news, the Stoxx 600's sector gauge for Banks plunged by 5.7% while that for Travel&Leisure stocks fell 5.2%.

Shares of Autos&Parts firms retreated by 4.68% alongside while the sector index for Oil&Gas retreated 3.82%.

Banks named in the report saw their share prices punished. Deutsche Bank slumped more than 8%, while Standard Chartered, alleged to have done business with a company laundering money for the Taliban, fell 6%, Barclays, HSBC, Danske Bank and Commerzbank were also sold off.

HSBC took an extra hit as China's Global Times newspaper reported the lender could be placed on China's unreliable entity list as a threat to national security.

Shares in Germany's United Internet slumped almost 24% after it warned that an increase in the cost of its network access deal with Telefonica Deutschland would hit profits this year.

New coronavirus-led restrictions in Spain and other European countries and news that the UK was considering a second lockdown hit travel and leisure stocks. In contrast, shares in food delivery services all rose, with Hello Fresh, Ocado, Delivery Hero and JustEat Takeaway all registering gains.

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