European stocks have worst week since Brexit
A tumble in Deutsche Bank spread to the banking industry, deepening a selloff that dragged European equities to their biggest weekly declines since before the Brexit vote.
Shares of the German lender sank 8.5pc, the most since the aftermath of the British referendum, after it said it would fight a $14bn fine from the US Justice Department that would settle a probe of the bank's selling of mortgage-backed securities. RBS and Credit Suisse also fell more than 4pc, highlighting the vulnerability of the recent rebound, with a gauge tracking the region's lenders down 5.6pc this week, erasing almost a third of its gain from the past two months.
The Stoxx Europe 600 Index lost 0.7pc to hit a six-week low.
"The Deutsche Bank news kind of rattled markets," said Jasper Lawler, an analyst at CMC Markets in London. "It just goes to show that we're still dealing with the same old headwinds: this low-interest- rate environment, which will go on for a while, and the regulatory scrutiny."
While European Central Bank President Mario Draghi downplayed the need for more aid last week, his unprecedented stimulus has raised concerns about lenders' profitability. (Bloomberg)
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