Turkey pushes European stocks lower
On Monday European stocks lost ground with Turkey’s perilous financial condition weighing on sentiment. The Stoxx Europe 600 dropped by 0.5%, after ending 1.1% lower on Friday as worries about Turkey took a toll.
The pan-European gauge is showing a fall of 1.4% for the year to date. Germany’s DAX shed 0.7%, while France’s CAC 40 gave up 0.5%. The U.K.’s FTSE 100 fell 0.6%. The euro changed hands at $1.1370, down from $1.1412 late Friday in New York.
European stocks have been selling off on fears about potential contagion from Turkey’s problems, especially in the banking sector. The Turkish central bank pledged to provide “all the liquidity the banks need” in a statement Monday. It also said banks would be able to borrow foreignexchange deposits from the central bank at a one-month maturity and one-week maturities. Analysts said Turkey’s reluctance to raise interest rates stood out.
Meanwhile, shares in Bayer AG dived 11% for the Stoxx Europe 600’s biggest drop. A jury has ordered the German chemical company’s Monsanto business to pay $289 million in a landmark lawsuit over whether exposure to two of its powerful weed killers, Ranger Pro and Roundup caused cancer.
Japan’s Nikkei tumbled 2 percent to a five-week low as a selloff in emerging market currencies spooked stock investors, with the safe-haven yen’s appreciation hurting sentiment and dragging down the broader market.
Commodity stocks underperformed on worries about emerging market economies after the South African rand fell more than 10 percent versus the U.S. dollar as massive falls in the Turkish lira triggered sell-offs in other currencies. All sectors except for services fell, with shippers, metal and iron stocks and construction machinery firms and financials stumbling.
Oil prices fell, with Brent crude off 25 cents at $72.56 a barrel and U.S. crude 21 cents lower at $67.43.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.