Forex Pros – European stock markets were down on Monday, as shares in the financial sector retreated ahead of an emergency meeting of senior European officials to discuss the region’s debt crisis, while U.S. futures indexes pointed to a lower open on Wall Street.
During European morning trade, the EURO STOXX 50 sank 1.3%, France’s CAC 40 fell 1.2%, while Germany’s DAX 30 declined 1%.
Officials from the European Commission and the European Central Bank were to hold an emergency meeting later Monday to assess the risk of the region’s sovereign debt crisis spreading from Greece to Italy.
Italy’s largest lender Unicredit, whose shares were suspended briefly on Friday following a sharp decline, lost 1.8%. The lender sank nearly 19% last week as Italy’s cost of borrowing rose and amid fears over the results of European bank stress tests due out on Friday.
Shares in rival Intesa Sanpaolo fell 2% after HSBC Holdings downgraded the stock to ‘neutral’ from ‘overweight’.
Contagions fears dragged down other major European lenders, with BNP Paribas slumping 3.3%, Commerzbank shares tumbling 4.2%, while Banco Santander shares fell 2%.
Meanwhile, share in French automaker Renault shed 1.7% after it said supply constraints had hurt sales in its core European market, despite reporting a 1.9% gain in first-half sales.
Rival Peugeot saw shares drop 3.1%, while German automaker Volkswagen saw shares slip 1.3%.
In London, the FTSE 100 edged 0.3% lower as shares in British Sky Broadcasting Group tumbled 7.1% amid worries over a proposed takeover by News Corp., in light of the News of the World phone-hacking scandal.
Losses were limited as shares in Northumbrian Water Group jumped 4.5% after it received a revised takeover bid from Hong Kong-based Cheung Kong Infrastructure Holdings worth nearly GBP2.41 billion.
The outlook for U.S. equity markets was downbeat. The Dow Jones Industrial Average futures pointed to a loss of 0.65%, S&P 500 futures dropped 0.85%, while the Nasdaq 100 futures indicated a decline of 0.8%.
Later in the day, the largest U.S. aluminum producer Alcoa was to be the first Dow Jones Industrial Average component to report earnings for the second quarter.
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