Investing.com - European stocks were sharply lower on Monday, as the announcement of a bailout plan for Cyprus sparked fresh concers over the financial crisis in the euro zone.
During European morning trade, the EURO STOXX 50 plunged 1.75%, France's CAC 40 retreated 1.37%, while Germany's DAX 30 plummeted 1.30%.
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 were broadly lower, as French lenders BNP Paribas and Societe Generale tumbled 2.96% and 3.87%, while Germany's Deutsche Bank and Commerzbank retreated 2.84% and 1.41%.
Peripheral lenders added to losses, with Spanish banks BBVA and Banco Santander plummeting 3.59% and 3.18%, while Italy's Intesa Sanpaolo and Unicredit plunged 3.33% and 4.91%.
Elsewhere, STMicroelectronics and Ericsson declined 0.65% and 1.76%, after agreeing to split up their chip venture ST-Ericsson.
In London, commodity-heavy FTSE 100 tumbled 1.07%, as U.K. lenders tracked their European counterparts lower.
HSBC Holdings dropped 0.76% and Lloyds Banking retreated 2.57%, while the Royal Bank of Scotland and Barclays plummeted 3.31% and 3.25% respectively.
Mining stocks were also on the downside, as shares in BHP Billiton and Rio Tinto declined 0.88% and 1.19%, while copper producers Xstrata and Kazakhmys plunged 1.46% and 3.34%.
On the upside, Marks & Spencer saw shares surge 3.88%, amid 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 0.60% decline, S&P 500 futures signaled a 0.97% loss, while the Nasdaq 100 futures indicated a 1.12% 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.
