A top European share index shed disappointing results of a 2-1/2 year low on Thursday, February 11, as an effect of a renewed slump in bank and miners with Societe Generale sliding in records.
Data shows that the pan-European FTSEurofirst 300 was down 3.3 percent at 1,201.06 points listed 1250 GMT. This has been, so far, the lowest level listed since August of the year 2013. According to Reuters, “The index had snapped a 7-day losing run in the previous session when it rose 1.8 percent. But a 10.8 percent slump so far in February has the index set for its biggest monthly fall since 2008, and it is down 16.4 percent so far this year”.
The top contributor of such data are the banking sector which shed over 6 percent low, in which, 10 percent is noted just for this week alone. The said data this week is a result of the growing concerns over profitability in a low-growth, low-interest rate environment.
Among its list, Societe Generale is listed as its biggest faller with a 12 percent drop after it declared a net income lower than expected in the fourth quarter of this year. Based on data presented in the Reuters report on Thursday, Societe Generale is hit by an additional 400 million euros ($450.4 million) that is set aside to cover litigation costs.
Many other European banks are affected with the global crisis showing index falling differently as per country. Swedish banks, Svenska Handelsbanken, Swedbank and Nordea Bank to name a few, are affected by 3.5-5.1 percent fall after the Sweden’s central bank cut its benchmark repo rate by 15 basis points to -0.5 percent. This is supported by Skandinaviska Enskilda Banken’s (SEB) fixed income macro strategist Olle Holmgren in a note saying that the current forecast presented today is the final in this cycle if the current market turbulence will subside and that the global economy will not enter a new recession. The same scenario is happening in many Italian Banks where a bank-heavy Italian FTSE MIB index fell over 5 percent.