Updated on
Summary European stocks sank on Monday, with a key blue-chip index tumbling to a three-week low.
Stocks were hurt by mounting fears that Spain could soon become the fourth euro zone member to request a full bailout.A ban on short selling of shares of financial institutions unveiled by the Italian and Spanish market authorities helped limit the damage on local banking stocks, but it was not enough to reverse the overall negative trend across European markets, where trading volumes were brisk.The FTSEurofirst 300 index of top European shares unofficially closed 2.3 percent lower at 1,024.84 points, while the euro zones blue-chip Euro STOXX 50 index dropped 2.3 percent to 2,185.04 points, breaking below its 50-day moving average, a key support level.Were moving closer to the cliff, the systemic risk is just going up but it seems that it will take a major event such as a bank failure or the Greeks saying they want to leave the euro zone, before we get real decisions by the EU leaders, Saxo Bank head of equity strategy Peter Garnry said.As long as theres no meeting of the EU cardinals and no bold decisions on the future of the bloc, things will just worsen.Europes STOXX bank index tumbled 2.6 percent, with Commerzbank falling 6.1 percent and BNP Paribas dropping 5.2 percent.
