By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets dropped on
Monday, tracking losses seen overnight in Asia and last week in the
U.S., where worries over rising Treasury yields and jitters over
monetary policy spooked investors.
The Stoxx Europe 600 index gave up 0.4% to 305.17, erasing a
0.3% gain from Friday.
Banks posted some of the biggest losses in the pan-European
index, with UniCredit SpA off 1.5%, Deutsche Bank AG (DB) down 1%
and Banco Santander SA (SAN) 0.9% lower.
Shares of Glencore Xstrata PLC erased 1.7% after reports said
the resource giant is expected to write down the value of assets
from recently acquired Xstrata. A representative from the firm
declined to comment. Glencore Xstrata reports first-half earnings
on Tuesday.
On a more upbeat note, shares of Atlas Copco AB climbed 2.1% on
news the Swedish engineering group will buy Edwards Group Ltd.
(EVAC) for $10.50 a share in cash, valuing the transaction at
around $1.6 billion, including debt.
More broadly, investors were cautious of placing any big
positions amid uncertainty over the U.S.'s monetary-easing program.
Federal Reserve Chairman Ben Bernanke has said any tapering of the
bank's $85-billion-a-month asset purchases will only happen if data
improve, and recent jobless claims and an improvement in core
retail sales have added to speculation it could happen as soon as
September.
The concerns pushed the yield on the 10-year U.S. Treasury to
hit the highest level in two years on Friday. In return, the Dow
Jones Industrial Average (DJI) suffered its biggest weekly
percentage drop and point loss of 2013.
The negative mood also spilled over into the new trading week in
Asia, where most markets closed lower.
On Wednesday, minutes from the Fed's latest policy-setting
meeting will be released, which could provide more information
about the central bankers' view on the tapering process.
Among country-specific indexes in Europe, the U.K.'s FTSE 100
index dropped 0.3% to 6,481.84, while France's CAC 40 index lost
0.7% to 4,093.81. Germany's DAX 30 index shaved off 0.7% to
8,331.95.
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