By Sara Sjolin, MarketWatch
Banks lead selloff
LONDON (MarketWatch) -- European stock markets kicked off the
week in deep-red territory on Monday, as investors fretted over the
intensifying standoff between Greece's new government and the EU,
as well as about disappointing Chinese trade data.
Putting Greece firmly on collision course with its European
partners, Prime Minister Alexis Tsipras on Sunday unveiled plans to
unravel several austerity measures that were conditions for the
country's 240 billion-euro ($272 billion) bailout program.
The comments weren't greeted well by the financial markets, with
the Athex Composite index slumping 5.1% to 761.99 on Monday.
Piraeus Bank SA sank 12%, Eurobank Ergasias SA lost 8.9%, and
National Bank of Greece SA shaved off 7.4%. Borrowing costs on
10-year Greek government bonds jumped 86 basis points to 11.057%,
according to electronic trading platform Tradeweb.
Tsipras's speech came after he and Greek finance minister Yanis
Varoufakis last week toured Europe in a bid to drum up support for
a new debt deal with greater leniency on repayments and austerity.
Varoufakis stepped up his push for a bridge loan to get more time
to renegotiate a debt deal, but such a program has so far been
ruled out by Eurogroup head Jeroen Dijsselbloem. The Eurogroup has
called an emergency meeting for Wednesday.
Amid the negotiation deadlock, Alan Greenspan, former chairman
of the U.S. Federal Reserve, told the BBC he believes Greece will
eventually leave the eurozone.
China trade jitters: Fresh data out of China added to the
negative trading mood. Chinese exports and imports dropped sharply
in January, suggesting both domestic and foreign demand are slowing
down. Stocks in Asia closed mostly lower.
Stock reaction: In reaction to these worries, investors sold off
European stocks. The Stoxx Europe 600 index dropped 1.2% to 368.84,
with banks leading the move south. Shares of BNP Paribas SA fell
3.5%, BBVA SA (BBVA) lost 2.6%, and Standard Chartered PLC gave up
2%.
Germany's DAX 30 index slumped 1.7% to 10,657.35, while France's
CAC 40 index lost 1.3% to 4,629.87. The U.K.'s FTSE 100 index
dropped 0.9% to 6,789.87.
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