Deutsche Bank Leads European Banks Lower
Euro futures contracts broke through the $1.23 level Friday afternoon as market sentiment continued to deteriorate throughout the day. The falling euro, along with losses across risk assets, is taking a toll on the European banking sector, which has a massive LIBOR manipulation scandal hanging over its head.
The losses in the European financial sector are being led by Deutsche Bank (NYSE: DB), which traded down about 5.25% to $33.58. Barclays (NYSE: BCS), which is at the epicentre of the LIBOR scandal, fell a little more than 2%. Swiss banks Credit Suisse (NYSE: CS) and UBS AG (NYSE: UBS) shed 2.40% and more than 3%, respectively. In Spain, Banco Santander (NYSE: SAN) traded down nearly 4.50%.
Traders and investors are shunning the European banks because of potential litigation exposure over LIBOR rigging as well as their exposure to the debt crisis in the region. Negative sentiment on the back of a worse than expected U.S. Non-Farm Payrolls report on Friday morning is also dragging down the entire financial sector. The U.S. financials also saw weakness on Friday.
Speculation that JPMorgan (NYSE: JPM) could also be pulled into the LIBOR rigging fallout, along with uncertainty about the size of its previously disclosed trading loss in its Chief Investment Office, continue to weigh on that stock. American counterparts Bank of America (NYSE: BAC) and Citigroup (NYSE: C) lost 1.50% and 2%, respectively.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.