Forexpros – European stocks closed lower Monday, as surging Spanish borrowing costs and concerns over the outlook for global economic growth continued to weaken market sentiment ahead of a meeting of euro zone finance ministers set to begin later in the day.
At the close of European trade, the EURO STOXX 50 fell 0.34%, France’s CAC 40 declined 0.38%, while Germany’s DAX 30 dropped 0.35%.
Equity sentiment remained pressured as the yield on Spain’s 10-year government bonds climbed to 7.11% earlier, above the 6% threshold, widely seen as unsustainable, prior to a meeting of euro zone finance ministers later Monday.
Euro zone officials were expected to discuss a plan announced last month and designed to help the region’s indebted countries and their struggling banking systems.
Meanwhile, concerns over the outlook for global growth persisted after disappointing economic reports from the U.S. and China.
Chinese Premier Wen Jiabao said over the weekend that the country’s economy faces “relatively large” downward pressure in the near-term.
Spanish lenders extended earlier losses, as shares in Banco Santander tumbled 2.76% and BBVA dropped 2.04%.
Shares in Germany’s Deutsche Bank also declined 0.40%, while French lenders BNP Paribas and Societe Generale turned lower, falling 0.03% and 0.68% respectively.
Meanwhile, Germany’s biggest retailer, Metro AG, saw shares dive 7.57% after CEO Olaf Koch said restrained spending will have a “significant impact” on business. Koch added that he sees a “small increase at best” in German consumption this year.
In bullish news, French chemicals manufacturer Arkema advanced 0.66% after CEO Thierry Le Henaff said that the company will seek to stay independent and focus on its own growth strategy, following last week’s reports that the company received takeover approaches valuing it at EUR5.5 billion euros or more.
In London, commodity-heavy FTSE 100 plunged 0.62%, as mining stocks remained sharply lower.
Shares in copper producer Xstrata plunged 2.39% and Kazakhmys tumbled 1.10%, while mining giants Rio Tinto and BHP Billiton declined 0.68% and 0.77% respectively.
Energy stocks also contributed to losses as shares in oil and gas major Anglo American plummeted 1.66% and BP saw shares retreat 1.20%.
Financial stocks remained mixed, as shares in the Royal Bank of Scotland jumped 2.16% and Lloyds Banking advanced 0.63%, while HSBC Holdings and Barclays declined 0.15% and 0.58%.
Elsewhere, Michael Page International dove 4.64%, after the recruitment company said gross profit declined 6.6% in the second quarter from the same period a year earlier and forecast the third quarter will be “challenging.” Rival Hays tumbled 2.95% following the news.
In the U.S., equity markets followed lower with the Dow Jones Industrial Average off 0.51% drop, the S&P 500 down 0.56%, while the Nasdaq gave back 0.58%.
In addition Monday, data reflected investor confidence in the euro zone for July deteriorated to the lowest level since July 2009, remaining in negative territory for the 12th consecutive month.
Sentix research group said its index of investor confidence declined to minus 29.6 in July from June’s reading of minus 28.9.
Investors are awaiting potential word from the euro zone leader meeting on Tuesday.
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