European stock markets dropped sharply early Monday, with investors selling banks and resource stocks as the Greece political crisis showed no signs of abating over the weekend.
The Stoxx Europe 600 index (XX:SXXP) -1.47% slid 1.4% to 248.41, after Greek anti-bailout party Syriza said over the weekend it would not take part in a coalition government to help put in place austerity measures. If President Karolos Papoulias can’t put a coalition together by Thursday, new elections will be held in June, and concerns are building Greece could exit the euro zone.
The Athens General index (GR:GD) -3.55% sank 3% to 593.96, led by a 5.4% drop for Bank of Greece SA NBG -6.34% (GR:ETE) -6.08% .
Among heavyweight banks, HSBC Holding PLC (UK:HSBA) -2.09% HBC -1.23% dropped 1.8%, while Banco Santander SA (ES:SAN) -3.65% STD -1.58% slid 3.5%. The Spanish government on Friday announced new provisioning requirements for banks to cover potential losses from healthy loans to real-estate developers.
The Spain IBEX 35 (XX:IBEX) -2.94% slid 2.5% to 6,820.30.
Resource stocks were also contributing to the slide for the Stoxx 600 and weighing on regional indexes. French oil major Total SA (FR:FP) -1.68% TOT -0.99% fell nearly 2%, driving the CAC 40 index (FR:PX1) -2.07% down 1.8% to 3,072.49.
The resource-heavy FTSE 100 index (UK:UKX) -1.49% sank 1.3% to 5,499.70, as BP PLC (UK:BP) -2.34% BP -0.33% dropped 2% and Royal Dutch Shell PLC RDS.A -0.59% (UK:RDSA) -1.89% fell 1.3%. Miner Rio Tinto PLC (UK:RIO) -1.48% RIO -1.80% dropped 1.6%.
The German DAX 30 index (DX:DAX) -1.65% fell 1.6% to 6,475.55, led by a 2.4% drop for Deutsche Bank (AGDE:DBK) +1.42% DB -1.71% and a 2.1% fall for Daimler (AGDE:DAI) +0.86% . BASF SE (DE:BAS) -1.08% dropped 1.8%.
Elsewhere, stocks largely brushed aside weekend news that the People’s Bank of China will lower the ratio of reserves banks must set aside as deposits at the central bank by a half percentage point.
Data have been compiled by Market Watch.