European stock market indices resumed slide today following the cash session open. A bounce we observed yesterday turned out to be short-lived and today's slump shows that concerns over the condition of the banking sector have not faded yet. However, a point to note is that the attention has shifted from the US banks to the European banks.
EuroStoxx Banks is trading over 4% lower today and drops to the lowest level in 10 weeks. Declines are broad with shares of all banks in the index trading lower today. However, there are some banks that are seeing bigger hits to their share prices than others.
Credit Suisse is in the center of the attention. The bank has been plagued by investor and regulatory concerns in recent years as it was implicated in several high-profile market scandals. It is the worst performing bank in the index today - shares were halted for volatility twice today already and are now trading over 20% lower on the day. It should be said that apart from poor sentiment towards the banking sector, there is also some company-specific news to justify the drop. Namely, Saudi National Bank, one of top investors in the bank, said that it cannot provide further assistance for Credit Suisse as it would require boosting their stake in the bank above 10% - a threshold it is prevented from reaching by regulators. Also, bank's auditor said yesterday that it has found 'material weakness' in Credit Suisse's financials.
European banking sector top laggards today:
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Credit Suisse (CSGN.CH) - not member of Euro Stoxx Banks index
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BNP Paribas (BNP.FR)
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Societe Generale (GLE.FR)
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UniCredit (UCG.IT)
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Deutsche Bank (DBK.DE)
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Commerzbank (CBK.DE)
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ING (ING.NL)
EuroStoxx Banks index movers. Source: Bloomberg
Euro Stoxx Banks index is dragging down broad market indices, like Euro Stoxx 600. Source: Bloomberg
Credit Suisse trades around 20% lower today and drops below 2.00 for the first time in history! Source: xStation5
