European stocks finish in the red; What are strategists saying?
European stocks closed with losses Monday, as Turkey’s perilous financial condition weighed on sentiment. Bayer AG shares were another big drag, after a U.S. court ruling against the company’s Monsanto unit.
What are markets doing?
The Stoxx Europe 600 dropped 0.3% to finish at 384.91, after losing 1.1% on Friday as worries about Turkey took a toll.
The pan-European gauge has lost 1.1% for the year to date.
Germany’s DAX 30 shed 0.5% to close at 12,358.74, while France’s CAC 40 PX1, -0.04% gave up less than 0.1% to end at 5,412.32. The U.K.’s FTSE 100 fell 0.3% to 7,642.45.
The euro changed hands at $1.1394, down from $1.1412 late Friday in New York.
What is driving the market?
European stocks have been selling off on fears about potential contagion from Turkey’s problems, especially in the banking sector.
The Turkish central bank pledged to provide “all the liquidity the banks need” in a statement Monday. It also said banks would be able to borrow foreign-exchange deposits from the central bank at one-month and one-week maturities. Analysts said Turkey’s reluctance to raise interest rates stood out.
Meanwhile, shares in Bayer dived 10% in the day’s biggest loss among the Stoxx Europe 600 components. A jury ordered the German chemical company’s Monsanto business to pay $289 million in a landmark lawsuit over whether exposure to two of its powerful weed killers — Ranger Pro and Roundup — caused cancer.
What are strategists saying?
“Clearly Turkey’s situation is another global risk,” said Konstantinos Anthis, head of research at ADS Securities, in a note.
“Even though the country itself has limited ties with the rest of the word, a spreading of the crisis to Europe via its banks’ exposure is a major concern.”
Source: MarketWatch – European stocks finish in the red as investors remain focused on Turkey
