Forexpros – European stock markets extended losses in thin trade on Thursday, as concerns over political uncertainty in Athens and the threat of a Greek exit from the euro zone continued to weigh on sentiment.
During European afternoon trade, the EURO STOXX 50 tumbled 1.23%, France’s CAC 40 dropped 0.91%, while Germany’s DAX 30 fell 0.68%.
Fears over the implications of a Greek exit from the euro zone continued as the country prepared for fresh elections next month, which could see anti-austerity parties take power.
On Wednesday, the European Central Bank said it had placed some Greek banks in an emergency liquidity assistance program, as they are severely undercapitalized.
Markets were also jittery after Spain successfully auctioned the full targeted amount of EUR2.5 billion at a government bond sale, but the country’s borrowing costs rose sharply, pressured higher by worries over the health of the country’s banking sector.
Financial stocks pushed lower, led by Italian lender Unicredit, down 5.91%, and closely followed by Dutch ING Group and France’s Societe Generale, whose shares tumbled 5.03% and 3.18% respectively.
Spain’s troubled lender, Bankia dove 26.42% after El Mundo newspaper reported that the bank’s customers had taken out more than EUR1 billion euros from their accounts since May 9, when the government said it will take over the bank.
French Investment group Axa also contributed to losses, plunging 3.41% after the company announced the opening of a representative office in Beijing.
Axa hopes to contribute to the rapid development of the asset management industry in China, where competition for assets is increasing and the range of investment options available to individuals and institutions is growing fast, according to reports.
In London, FTSE 100 declined 1.16% as U.K. lenders tracked their European counterparts lower.
Shares in Barclays plummeted 4.74% and the Royal Bank of Scotland dropped 3.84%, while Lloyds Banking and HSBC Holdings retreated 3.10% and 2.01%.
HSBC Holdings announced earlier that it cut costs by USD2 billion after one year of a 3-year turnaround plan, and is on target to meet its return on equity and other financial targets.
Meanwhile, mining giants Bhp Billiton and Rio Tinto plunged 1.96% and 2.13% respectively, extending earlier losses, while copper producers Xstrata and Kazakhmys pushed 3.65% and 3.09% lower.
Elsewhere, shares in Aviva tumbled 3.74% after the U.K. insurer said it will conduct a strategic review of all its businesses and strengthen its capital base, in what may lead to the company’s most important overhaul since 2007.
On the upside, shares in Cookson Group jumped 7.24% after the world’s biggest maker of ceramic linings for metal smelters said it has started a strategic review and may split its main divisions.
In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to rise of 0.06%, S&P 500 futures signaled a 0.03% gain, while the Nasdaq 100 futures indicated a 0.07% loss.
Later in the day, the U.S. was to produce government data on unemployment claims, followed by a report on manufacturing activity in the Philadelphia area.
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