Financials Hit by East Asian Growth Concerns
LONDON -- European stocks are starting the week on a dire note Monday, quickly losing the momentum gained on Friday's U.S. jobs report as the World Bank cut its East Asian growth forecast. Continuing fears surrounding Spain and the "will they or won't they" bailout speculation have been putting on pressure as eurozone finance ministers meet to discuss the bloc's debt problems. On the continent, the major economies are suffering most today, with Germany's DAX (INDEX: ^GDAXI) down 1.3%.
As always, the following price moves are based on this morning's European trading.
With the broader risk-off attitude today, financial stocks are generally sagging, particularly in Spain, where the uncertainty surrounding the potential for a bailout request -- or, rather, the potential there will be no bailout request -- is causing sharp losses throughout the country's big names. This is led by Bankia (NASDAQOTH: BNKXF.PK), which is down 6.7% as potentially the most likely bank to suffer if Spain fails to bring its finances under control.
Elsewhere, Belgium financial KBC Groep (NASDAQOTH: KBCSY.PK) is also getting hit, down almost 5% after it announced targets for a reorganization that disappointed investors. The bank, which has been one of the leading shares in Europe this year, said it plans to reduce operating expenses as a proportion of revenue to 55% by 2015, failing to impress interested parties. And a lack of profit or revenue targets did not go unnoticed.
One noticeable exception to the weakened financial sector today, however, is the National Bank of Greece (NYS: NBG) , which is up more than 7% as it continues to see demand after news last week that it is looking to buy rival firm Eurobank Ergasias in order to maintained its market dominance. With this and some recovery in sentiment surrounding the Hellenic Republic, Greece's biggest lender is managing to claw back much of the losses seen this year.
Away from financials, the U.K.'s Cookson Group (NASDAQOTH: CKSNY.PK), a materials company that provides ceramic linings for metal smelters, is grabbing many of the headlines today, down 13.5% after it said results will miss forecasts. The company said that because of poor demand from the steel-production markets, which were hit hard over the summer period, it will miss its profit target for this year. At one point this led shares to plummet more than 18%.
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