Stocks slide as miners, banks feel the heat
Frankfurt (Feb 9) European stocks seesawed in a choppy morning of trade as investors remain cautious about global economic growth prospects.
The pan-European STOXX 600 was down 0.8 percent. The DAX was lower after December German industrial output fell 1.2 percent month-on-month, according to the country's Economy Ministry.
European markets tumbled at Monday's close to finish sharply lower, as heavy losses in several sectors, a continued decline in commodity prices and Friday's mixed U.S. employment data added to concerns over global growth. In the U.S., stocks were sharply lower for most of Monday as similar concerns weighed on investors.
The sell-off in Europe and the U.S. drove negative sentiment in Asia on Tuesday, where stocks in Australia and Japan were sharply lower overnight, with the Nikkei 225 down more than 5 percent as it heads into the close.
As investors looked for cover in safe-haven assets, the yield on 10-year Japanese government bonds (JGB) fell into negative territory for the first time. Bond prices move inversely to yields.
"The catalyst appeared to come from the European banking sector as screens flashed red across the board in scenes of total carnage, with equity markets selling off hard across the board over concerns about the future profitability of the whole sector, in an era where interest rates look set to go further into negative territory," Michael Hewson, chief market analyst at CMC Markets, said in a note on Tuesday.
"Overnight the ten-year Japanese bond became the latest to succumb to this new form of monetary madness."
Analysts said the initial bounce on Tuesday was due to investors buying on the dip as the broader economy still looks healthy.
"You're getting the capital markets being buffeted from gales from all corners…to our mind, the world economy, the real economy looks in better shape than markets are telling us…that probably is telling us that those with strong constitution will want to add to their developed market equities in particular," William Hobbs, head of investment strategy for Europe at Barclays, told CNBC.
Vestas wind surges
On the earnings front, French drugmaker Sanofi reported a fall in fourth quarter sales and business net income. Shares were trading lower.
And Europe's largest biotechnology firm Actelion was in positive territory after it said that 2015 core earnings rose 9 percent, hitting analyst expectations.
In the travel space, TUI Group posted a first quarter underlying loss before interest, tax and amortisation (EBITA) of 101.7 million euros ($114 million), a narrower loss than a year ago. The firm said that bookings to Turkey this summer were down around 40 percent resulting from security concerns, sending shares lower.
Denmark's Vestas Wind surged as much as 8 percent after posting fourth quarter revenue that beat analyst expectations and raised its dividend.
Italian banks under pressure
The banking sector was once again in focus for investors. The chief executive of Swedish bank Swedbank is stepping down from his post with immediate effect. In a statement, the lender said that "it is time for new leadership and a new CEO who can take Swedbank to the next level". The news sent shares lower.
Source: CNBC
