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European stocks open sharply lower on oil rout; Dax plummets 2.91%

European stocks opened sharply lower on Wednesday, as concerns over plummeting oil prices continued to weigh, as well as worries over global economic growth.

During European morning trade, the EURO STOXX 50 lost 2.91%, France’s CAC 40plunged 2.97%, while Germany’s DAX 30 plummeted 2.91%.

Sentiment weakened after oil prices dropped once again below $30 per barrel on Tuesday to the lowest level in 12 years after the International Energy Agency said that unseasonably warm weather and rising supply will keep the oil market oversupplied until at least late 2016.

Investors also remained cautious after data on Tuesday showed that the annual rate of growth in China slowed to 6.8% in the three months to December from 6.9% in the previous quarter, matching forecasts.

The data indicated that the world’s second-largest economy is continuing to lose momentum, after falls in the nation’s currency earlier this year fueled fears over a China-led slowdown in global growth.

Energy stocks were broadly weaker, as French oil and gas major Total SA (PA:TOTF) plummeted 2.86% and Italy’s ENI (MI:ENI) lost 1.91%, while Norwegian rival Statoil plunged 3.79%.

Financial stocks added to losses. French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) tumbled 3.11% and 3.35%, while Germany’s Deutsche Bank(DE:DBKGn) and Commerzbank (DE:CBKG) lost 2.91% and 4.13%.

Among peripheral lenders, as Italy’s Unicredit (MI:CRDI) and Intesa Sanpaolo (MI:ISP) dove 3.89% and 2.81% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) sank 2.76% and 2.55%.

On the upside, ASML Holding (AS:ASML) NV rallied 2.36% after the Dutch semiconductor-equipment maker announced plans to buy back an additional €1 billion of its stock, in a move to reward investors after shares drove more than 10% so far this year.

In London, commodity-heavy FTSE 100 lost 2.16%, weighed by sharp losses in the mining sector.

Shares in Fresnillo (L:FRES) and Rio Tinto (L:RIO) plummeted 3.69% and 3.58% respectively, while Bhp Billiton (L:BLT) dove 5.17% and Glencore (L:GLEN) plunged 5.29%.

Financial stocks were also on the downside, as Lloyds Banking (L:LLOY) tumbled 2.42% and the Royal Bank of Scotland (L:RBS) lost 2.49%, while HSBC Holdings (L:HSBA) andBarclays (L:BARC) sank 3.10% and 3.60% respectively.

Elsewhere, BAE Systems (L:BAES) saw shares plummet 2.12% as hopes for a big order of its Typhoon jets from Saudi Arabia, which makes up about 20% of BAE’s revenues, began to wane.

In the U.S., equity markets pointed to a sharply lower open. TheDow Jones Industrial Average futures pointed to a 1.98% loss, S&P 500 futures a 1.95% drop, while the Nasdaq 100 futures indicated a 2.20% plunge.

Last modified on Monday, 15 February 2016

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