European Markets Tumbled As Bank Shares Weakened Further

(RTTNews) - The European markets ended the first session of the new trading week solidly in negative territory. A wide range of concerns weighed on investor sentiment Monday. Investors were in a cautious mood ahead of the first U.S. presidential debate between Donald Trump and Hillary Clinton later today. Energy stocks weakened ahead of the upcoming OPEC meeting in Algiers, while banks and financial stocks were under pressure due to concerns over Deutsche Bank.

The Bank of Japan also stated that it is willing to use every possible tool, if necessary, to achieve its price stability objective, Governor Haruhiko Kuroda said Monday.

"There is no better opportunity than now to completely get out of deflation," he told business leaders in Osaka. Just talking about a limit to monetary policy does not help at all, said Kuroda.

Eurozone is witnessing widespread feelings of insecurity, including economic insecurity, that remains a major concern and policymakers need to renew their efforts to boost growth in the euro area, European Central Bank President Mario Draghi said Monday.

"We cannot simply wait for better times: we need to renew our efforts to ensure that Economic and Monetary Union offers protection and prosperity," Draghi said in his opening statement at a hearing before a committee of the European Parliament. "The ECB will do its part."

"Low rates are a symptom of the underlying economic situation," he said.

"They reflect weak long-term growth trends and the protracted macroeconomic slump that has resulted from the crisis."

The pan-European Stoxx Europe 600 index weakened by 1.53 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.86 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.52 percent.

The DAX of Germany dropped 2.19 percent and the CAC 40 of France fell 1.80 percent. The FTSE 100 of the U.K. declined 1.32 percent and the SMI of Switzerland finished lower by 1.30 percent.

In Frankfurt, Deutsche Bank sank 7.58 percent after German magazine Focus reported Chancellor Angela Merkel has ruled out any state aid for the bank. Commerzbank also dropped 4.06 percent.

Lanxess surged 7.86 percent after it announced it would buy specialty chemicals company Chemtura Corp.

In Paris, BNP Paribas decreased 3.27 percent and Societe Generale surrendered 2.95 percent. Credit Agricole also finished down by 2.74 percent.

Total declined 1.89 percent and Technip forfeited 0.74 percent.

In London, InterContinental Hotels dropped 5.75 percent after Morgan Stanley reduced its rating on the stock to "Underweight" from "Equalweight."

Lloyds Banking Group fell 3.09 percent after Goldman Sachs downgraded its rating on the stock to "Sell" from "Neutral."

Royal Bank of Scotland declined 2.79 percent and Barclays lost percent. Standard Chartered surrendered percent and HSBC slipped percent.

WPP weakened by 2.47 percent after Jefferies lowered its rating on the stock to "Hold" from "Buy."

Oil rig builder Lamprell soared 11.33 percent after bagging a new contract worth about $90 million from Jacktel AS, a unit of Master Marine AS.

Novartis fell 1.45 percent in Zurich despite getting three FDA approvals for the expanded use of Ilaris to treat three rare and distinct types of periodic fever syndromes.

Food group Aryzta declined 1.98 percent after reporting a 5.7 percent drop in full-year earnings.

German business sentiment improved strongly to its highest level in more than two years in September, recovering from a fall in the previous month, as better optimism prompted companies to look forward to a 'golden autumn', results of a key survey showed Monday.

The Ifo Business Climate Index rose to 109.5 points from a revised 106.3 points in August, marking its highest level since May 2014, the Munich-based Ifo Institute said. Economists had forecast a score of 106.3.

Italy's retail sales decreased in July after rising in the previous three months, figures from the statistical office ISTAT showed Monday. Retail sales fell a seasonally adjusted 0.3 percent month-over-month in July, reversing a 0.3 percent increase in June.

The U.K. mortgage approvals declined to the lowest level in 20 months in August, the British Bankers' Association said Monday.

The number of mortgages approved for house purchases fell to 36,997 in August from 37,672 in July. This was the lowest since January 2015, when mortgages totaled 36,615. Nonetheless, approvals stood above the expected level of 36,750.

Sentiment in the British financial services sector weakened for the third straight time in the three months to September, the financial services survey from the Confederation of British Industry and PricewaterhouseCoopers showed Monday.

A balance of -13 percent said they were less optimistic about their overall business situation compared to -13 percent in the prior quarter. This was the third consecutive fall, the longest period of decline in sentiment since 2009.

After reporting a substantial increase in U.S. new home sales in the previous month, the Commerce Department released a report on Monday showing a sharp pullback in new home sales in the month of August.

The report said new home sales tumbled by 7.6 percent to an annual rate of 609,000 in August after surging up by 13.8 percent to a revised 659,000 in July. Economists had expected new home sales to drop to a rate of 598,000 from the 654,000 originally reported for the previous month.