European stocks got obliterated on Monday as investors continued to flood out of risky equities and towards safer assets ahead of the UK’s EU membership referendum, and against a climate of doom and gloom around the global economy as a whole.
At the close, all of continental Europe’s major indexes were down at least 1.5%, with several seeing losses of more than 2% on a day when stocks continued where they left off prior to the weekend.
Once again the biggest loser on the day was Italy’s FTSE MIB, down 3.02% to 16.602, pushed lower by weak banking stocks. Investors continue to worry about the impact of negative interest rates in the eurozone and their impact on bank profitability, as well as the ongoing woes surrounding the stability of Italy’s financial sector. Monday was the second consecutive day the MIB fell 3%.
Two banks were down more than 9% on the week’s first day of trading, while several more dropped in excess of 5%. Here’s how the MIB looked on the day:
In Britain, the FTSE 100 also saw a large fall, down 1.16% to 6,045 points, with a combination of banking, telecoms and security stocks pulling down the index. Security services and outsourcing firm G4S saw losses of more than 4.7% after it emerged that Orlando nightclub attacker Omar Saddiqui Mateen once worked for the company as an armed security officer. Despite losing more than 1%, the FTSE came off relatively unscathed, and was the smallest faller of any index on the continent. Here’s the FTSE:
Here’s the scoreboard for the rest of the biggest indexes on the continent:
- German DAX: down 1.77% to 9,661
- French CAC 40: down 2.04% to 4,218
- Spanish IBEX 35: down 1.91% to 8,328
- Eurostoxx 50: down 2.05% to 2,853
Earlier in the day, Accendo Markets’ Mike van Dulken said in an email to clients that a combination of weak data coming out of China, a falling oil price, and the ever-present Brexit fears was pulling stocks down. Here’s what he said:
Equity indices are off their worst level, but still very much under pressure as markets remain risk averse into the new week on account of UK referendum Brexit fears, China data adding to slowdown fears and what major central bank policy updates might (or might not) offer us this week. A US Crude oil price back below $50 is not helping, nor sovereign bond yields near record highs if not already negative while the US dollar holds up near recent highs to the detriment of commodities, excluding the precious metals of course.