European Markets Decline Amid Trade Tensions
(MENAFN) European stock exchanges saw a downturn on Friday, driven by heightened anxiety over escalating trade disputes between the United States and China, along with growing instability in the American banking and finance industries.
The comprehensive Stoxx Europe 600 benchmark dropped by 1.54%, translating to a decrease of 8.69 points, settling at 562.91 by 07:45 GMT. Within the same period, the banking index registered a sharper fall of 2.7%.
Germany’s DAX 40 retreated by 2.11%, ending at 23,759.79 points. Meanwhile, the UK’s FTSE 100 saw a decrease of 1.52%, finishing at 9,292.5 points. In France, the CAC 40 index declined by 0.9% to 8,115.27, and Italy’s FTSE MIB 30 registered a 2% dip, closing at 41,530.84.
Adding to global market worries is the persistent US federal government shutdown, which stems from budget disagreements and continues to generate unpredictability across financial markets.
Further unsettling the financial environment, regional banking firms Zions Bancorp and Western Alliance disclosed they had encountered fraud within portions of their loan books.
These revelations have sparked apprehension about the robustness of their credit portfolios.
The downturn, primarily triggered by declines in banking and financial stocks, has influenced investors’ tolerance for risk.
The VIX index, often referred to as the "fear index" due to its measurement of expected volatility in the S&P 500 Index, climbed to 25.31—its highest value in nearly six months.
This elevated caution among investors extended into European markets, resulting in a widespread sell-off of banking shares throughout the region at the beginning of the new trading session.
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