EUROPE MARKETS: Bank Stocks Lead Selloff In Europe On "Trump Trade" Worries
March 22 2017 - 05:49AM
Dow Jones News
By Carla Mozee, MarketWatch
ING under Dutch criminal investigation
European stocks fell to a two-week low Wednesday, with bank
shares among the worst performing, as investors questioned whether
the new U.S. administration can soon deliver the fiscal and
regulatory changes needed to support the "Trump trade".
The Stoxx Europe 600 dropped 0.9% to 372.50, hovering around its
lowest since March 7, as all sectors sank into the red. Financial ,
industrial and basic material shares were losing the most, while
the defensive utilities sector edged down.
A loss Wednesday would be the pan-European benchmark third in a
row. Regional equities on Tuesday sagged during the session, but
suddenly dropped to intraday lows as U.S. equities started to slide
(http://www.marketwatch.com/story/us-stock-futures-edge-up-as-nasdaq-tries-for-another-record-2017-03-21).
The selloff in U.S. stocks came as the yield on the 10-year
Treasury hit a three-week low
(http://www.marketwatch.com/story/treasury-yields-rise-after-french-presidential-debate-2017-03-21).
"Treasury yields have been reversing since the Fed meeting last
week, but it seems as though [there's] concern in the U.S. over the
ability for Donald Trump to pull off his substantial fiscal plans.
The trigger seems to have come from the perception that Trump will
struggle to get through the changes to Obamacare, and if this is
the case then what else will he struggle with?" wrote Richard
Perry, market analyst at Hantec Markets, in a note.
Thursday's vote in the U.S. House of Representatives on the
Republican Party's health care plan may be a litmus test for
investors on whether the push for reforms in the U.S. will be
successful.
Read:U.S. president goes to bat for 'Trumpcare' ahead of vote
(http://www.marketwatch.com/story/trump-today-president-goes-to-bat-for-trumpcare-ahead-of-vote-2017-03-21)
Shares of European banks -- many of which have U.S. operations
-- have been beneficiaries of expectations that regulatory
restrictions will be loosened and that the Fed will continue to
raise interest rates, as higher rates help bank margins. The Stoxx
Europe 600 Bank Index was shaken down 1.9% on Wednesday.
Among decliners, Deutsche Bank AG (DBK.XE) (DBK.XE) fell 1.7%,
Credit Agricole SA (ACA.FR) lost 2.2% and Banco Santander SA (SAN)
(SAN) moved down 1.2%.
Movers: Also weighing on the bank sector was ING Groep NV's
(ING) (ING) disclosure that it is under a criminal investigation by
Dutch officials could lead to significant penalties. Reports
Wednesday said the investigation was tied to an alleged bribery
case in Uzbekistan.
Fiat Chrysler Automobiles (FCA.MI) fell 2.7% following reports
that a formal investigation into whether the company cheated in
tests for diesel emissions was opened by French prosecutors.
Gemalto NV shares (GTO.AE) plunged 18% after the digital
security firm cut its financial guidance.
Akzo Nobel NV (AKZOY) (AKZOY) fell 2.7% after the Dutch paint
and chemicals maker rejected a second takeover offer from PPG
Industries Inc
(http://www.marketwatch.com/story/akzo-nobel-rebuffs-ppgs-sweetened-24-bln-bid-2017-03-22).
(PPG) .
Indexes: Germany's DAX 30 index tumbled 0.7% to 11,881 and
France's CAC 40 fell 0.8% to 4,962.73.
The U.K.'s FTSE 100 fell 0.9% to 7,310.99.
The euro was buying $1.0787, compared with $1.0812 late Tuesday
in New York.
(END) Dow Jones Newswires
March 22, 2017 06:34 ET (10:34 GMT)
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