By Sara Sjolin, MarketWatch
Oil jitters hit sentiment again
European stock markets built on last week's selloff on Monday,
with the benchmark index heading for its lowest close in more than
15 months as investors continued to dump risky assets such as
equities.
The Stoxx Europe 600 index slumped 2.4% to 318.12, setting it on
track for its lowest close since Oct. 20, 2014, according to data
from FactSet.
Germany's DAX 30 index erased 2.8% to 9,028.19, while France's
CAC 40 index lost 2.6% to 4,091.50. The U.K.'s FTSE 100 index
skidded 2%
(http://www.marketwatch.com/story/ftse-100-stuck-in-tight-range-after-last-weeks-selloff-2016-02-08)
to 5,732.65.
With no major data releases or central bank events on Monday,
investors stuck to their negative sentiment from last week, when
the pan-European benchmark posted a 4.8% weekly slide. That week
delivered a disappointing headline reading on U.S. nonfarm
payrolls, a hit for European exporters from a stronger euro and
continued jitters in the commodity markets.
Chinese stock markets are closed for trade
(http://www.marketwatch.com/story/when-is-chinas-stock-market-closed-for-lunar-new-year-2016-02-05)
all week to celebrate the Lunar New Year, providing little
direction for European stocks at the open. However, data out over
the weekend showed China's foreign-exchange reserves fell to the
lowest level in more than three years
(http://www.marketwatch.com/story/chinas-foreign-currency-reserves-drop-9947-bln-2016-02-06)
last month, in another sign of capital flight as the yuan
weakens.
"Sentiment continues to remain downbeat because of growing
concerns about the global economy, which is not looking healthy at
all at the moment, with growth in China slowing down and the U.S.
struggling. In addition, oil prices have been unable to further
extend their recent gains," said Fawad Razaqzada, technical analyst
at Forex.com, in a note.
"It looks like oil traders are once again discouraged by a
slightly stronger dollar and the lack of any breakthrough in talks
between some OPEC and non-OPEC producers," he added.
Read: Venezuela fails to persuade Saudis to cut oil production
(http://www.marketwatch.com/story/venezuela-fails-to-persuade-saudis-to-cut-oil-production-2016-02-07)
Oil jitters: Oil futures remained volatile on Monday and weighed
on Europe's energy-related companies. Crude oil lost 3.1% to
$29.94, after having traded as high as $31.38 early in the day.
Shares of Italian oil-services company Saipem SpA (SPM.MI) sank
21%, Seadrill Ltd. (SDRL.OS) lost 13%, Tullow Oil PLC (TLW.LN)
erased 6.5%, and Amec Foster Wheeler PLC (AMFW.LN) fell 6.2%.
Shine for gold: Gold prices jumped 1.9%
(http://www.marketwatch.com/story/gold-jumps-to-3-month-high-as-equities-continue-selloff-2016-02-08)
to $1,179.50 an ounce, benefiting from the perceived haven status
of the metal. Shares of Randgold Resources Ltd. (RRS.LN) (RRS.LN)
rose 4.3% after the West African gold miner lifted its dividend
after posting record output
(http://www.marketwatch.com/story/randgold-lifts-dividend-after-record-output-2016-02-08).
Precious-metals miner Fresnillo PLC (FRES.LN) climbed 2.1%.
Banking selloff: European banking shares took the brunt of the
selloff on Monday, with the Stoxx Europe 600 Banks Index slumping
3.6%. The index last week logged six straight weeks of declines,
its longest weekly losing stretch since 2008, according to FactSet
data.
The exodus out of bank stocks in Europe comes amid a perfect
storm of lackluster earnings, negative interest rates, high debt
levels and weak economic activity, according to analysts.
Read: Why a selloff in European banks is ominous
(http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)
(http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)Among
biggest decliners in the sector on Monday, shares of Eurobank
Ergasias SA (EUROB.AT) plunged 27%, Banca Monte dei Paschi di Siena
SpA (BMPS.MI) dropped 7.5%, Commerzbank AG (CBK.XE) fell 5.8%, and
BNP Paribas SA (BNP.FR) lost 4%.
Other movers: Shares of Novozymes AS (NZYM-B.KO) slid 5% after
the Danish enzyme maker said it's splitting the company into three
divisions
(http://www.marketwatch.com/story/novozymes-splits-business-into-3-divisions-2016-02-08)
in an effort to boost both innovation and its ability to act
swiftly if the market changes.
Swedish lock maker Assa Abloy AB (ASSA-B.SK) lost 7.5% after the
company said it's seeing weaker demand in many emerging markets
(http://www.marketwatch.com/story/assa-abloy-profit-rises-sees-weaker-demand-ahead-2016-02-08).
Invitation: Investing Insights -- A global markets survival
guide
If you'll be in London on Tuesday, Feb. 23, you're invited to
join us for an evening of cocktails and conversation on the topics
of shifting monetary policy, growth, currencies, and the outlook
for investing opportunities and risks in European and global
markets.
Our panelists for the evening will include MarketWatch Personal
Finance and Investing Columnist Robert Powell; Mark Hulbert, Editor
of the Hulbert Financial Digest; and Virginie Maisonneuve, Founder
and Managing Director of Maisonneuve Global Advisors.
The event is free and open to the public, but reservations are
required. For more information or to RSVP for the event, please
email (MarketWatchevent@wsj.com).
(END) Dow Jones Newswires
February 08, 2016 07:50 ET (12:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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