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Banking concerns weigh on European stocks

Banking concerns weigh on European stocks

European stock markets fell sharply Wednesday amid renewed concerns about the financial well-being of the banking system and ahead of key Christmas trading news in the U.S.
The FTSE 100 index of leading British shares was down 100.57 points, or 2.3 percent, at 4,298.56 despite earlier gains in Asian markets.
Germany's DAX fell 85.43 points, or 1.8 percent, to 4,570.48, while France's CAC-40 was 35.52 points, or 1.1 percent, lower at 3,162.37.
"Banks are the key sector undermining sentiment amid a resurrection of concerns of capital going forward," said Keith Bowman, an equities analyst at stockbrokers Hargreaves Lansdown in London.
Those concerns were stoked Tuesday by confirmation that Citigroup Inc. is to merge its Smith Barney brokerage into a joint venture with Morgan Stanley, relinquishing control in exchange for $2.7 billion in badly needed cash. Royal Bank of Scotland PLC, which is now majority-owned by the British government, also said it was raising around 1.7 billion pounds ($2.5 billion) by selling its 4.3 percent stake in Bank of China.
In addition, analysts at Morgan Stanley said HSBC PLC, Britain's biggest bank by market capitalization, may have to raise between $20-30 billion and halve its dividend to plug a capital shortfall as earnings deteriorate by more than anticipated.
"While HSBC is winning market share we do not think this will be enough to offset the negative cyclical and structural trends," Morgan Stanley's analysts said.
HSBC's shares fell a massive 8.3 percent in the wake of the warning. Barclays PLC slumped nearly 15 percent as it confirmed that it was culling 2,100 staff from its retail and commercial banking arm, while Royal Bank of Scotland fell 6.7 percent, despite its modest fundraising.
Deutsche Bank AG, Germany's biggest bank, reported a


Updated : 2021-03-09 13:16 GMT+08:00