Dow Dodges European Mess; Banking Sector Shoots Down FTSE, DAX, CAC

Dow Dodges European Mess; Banking Sector Shoots Down FTSE, DAX, CAC

Spreadex  | Oct 08, 2018 16:55

While the Dow Jones dodged another round of losses – so far, at least – the European indices only saw their start of the week decline worsen.

The Dow didn’t do much after the bell, opening effectively changed at 26450. And while that doesn’t sound like much, given the deep shade of red the index’s European counterparts have found themselves in this Monday, it’s certainly not nothing. It was likely aided by the fact that the bond market – the main source of last week’s lows – is closed for Columbus Day/Indigenous Peoples Day.

The situation this side of the Atlantic couldn’t have been more different to the placid start from the Dow Jones. Already softened up by an awful showing from the returning Chinese markets overnight, the re-emergence of the Italy/EU budget deficit battle as a key market mover proved to be a disaster for the European indices.

Led by the FTSE MIB, which plunged nearly 2.4% as one of the Italian Deputy Prime Minister Luigi Di Maio claimed the country’s government would ‘not retreat’ from its spending plans despite the concerns of the EU, the region was an absolute mess on Monday.

The FTSE, DAX and CAC all fell 1% – ducking the wrong side of 7250, 12000 and 5300 respectively – with the uniformity of the losses reflecting the macro-focused nature of the decline.

The banking sector proved to be the most notable drag; Deutsche Bank (DE:DBKGn) was down 1.7%, Barclays (LON:BARC) 2% and Credit Agricole (PA:CAGR) 2.2%, with Italy’s UniCredit (LON:0RLS) was pushing a 4% decline.

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