WSJ: European Stocks Tumble on Banking Sector Weakness
European stock markets tumbled Friday, led lower by weakness in the banking sector, and German government bonds traded at record low yields as Greece’s debt crisis continued to cause headaches, while a technical outage at Bloomberg had traders sitting furiously at their desks.
The Stoxx Europe 600 index fell 1.5%, with the Stoxx bank index down 1.9%. In Germany, the yield on the benchmark 10-year Bund traded at 0.05%, breaking through Thursday all-time low, while the DAX equity index fell 1.9%, heading for its worst weekly decline since December 2014. Yields fall as bond prices rise.
Several factors came crashing into play, not the least the technical problems for Bloomberg terminals globally, which left traders powerless to communicate with each other across their terminals’ systems. It also prompted the U.K.’s debt management office to reschedule a multibillion Treasury bill tender. Bloomberg is a competitor of Dow Jones and The Wall Street Journal on financial news.
Another factor in play was China—the world’s second largest economy has allowed fund managers to lend stocks for short selling, to increase the supply of shares, the Securities Association of China said on its website on Friday.
The Chinese stock market slumped over 5% in post-close trading, weighing on sentiment in Europe.
In currency markets, the euro was fairly robust, trading slightly higher against the dollar at $1.0804, though strategists attributed this to recent poor data out of the U.S., that has pressured the rampant greenback.
In commodity markets, Brent crude lost 0.6% to trade at $63.57 a barrel. Later in the session, investors will be eyeing consumer price numbers from the U.S.
Write to Josie Cox at josie.cox@wsj.com and Andrea Tryphonides at andrea.tryphonides@wsj.com