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Markets

European stocks remain sharply lower on Cyprus jitters; Dax down 1.02%

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Investing.com - European stocks remained sharply lower on Monday, as the announcement of a bailout plan for Cyprus sparked fresh concerns over the financial crisis in the euro zone.

During European afternoon trade, the EURO STOXX 50 plummeted 1.58%, France's CAC 40 retreated 1.26%, while Germany's DAX 30 tumbled 1.02%.

On Saturday, the European Union and International Monetary Fund reached an agreement on a EUR10 billion bailout for Cyprus. In return for the bailout international creditors demanded that all bank customers must pay a one-time tax on deposits.

The agreement marked the first time since the onset of the debt crisis that depositors have been forced to take a haircut in return for financial aid and triggered a run on cash machines in Cyprus over the weekend.

The parliament in Cyprus was to vote on whether to approve the tax proposal later in the day. If the vote was defeated media outlets in Cyprus said banks could remain closed on Tuesday, following a public holiday on Monday, to avoid mass withdrawals.

Financial stocks pushed lower, as French lenders BNP Paribas and Societe Generale plummeted 4.52% and 5.30%, while Germany's Deutsche Bank and Commerzbank plunged 3.55% and 1.16%.

Peripheral lenders also remained broadly lower, with Spanish banks Banco Santander and BBVA retreating 3.35% and 4.36%, while Italy's Intesa Sanpaolo and Unicredit tumbled 3.33% and 5.17% respectively.

Elsewhere, STMicroelectronics surged 5.34%, erasing earliers losses, while Ericsson declined 1.03%, after the two companies agreed to split up their chip venture ST-Ericsson.

In London, commodity-heavy FTSE 100 declined 0.61%, as U.K. lenders continued to track their European counterparts lower.

Lloyds Banking retreated 2.87% and Barclays plummeted 4.71%, while the Royal Bank of Scotland slid 5.12%. HSBC Holdings overperformed on the other hand, edging up 0.09%.

Meanwhile, mining stocks remained on the downside, as shares in BHP Billiton and Rio Tinto declined 1.21% and 1.22%, while copper producers Xstrata and Kazakhmys plunged 3.22% and 7.49%.

On the upside, Marks & Spencer extended earlier gains, soaring 7.39%, following reports the Qatar Investment Authority was assembling a group of private equity investors to make an GBP8 billion bid on the retailer.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.58% decline, S&P 500 futures signaled a 0.87% loss, while the Nasdaq 100 futures indicated a 0.94% drop.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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