European Stocks Plunge on Renewed Eurozone Fears

LONDON -- European equity markets have started the week deep in the red Monday, with financial stocks leading losses as renewed fears surrounding the eurozone sovereign-debt crisis keep the pressure on. This comes as the Spanish 10-year bond yield pushed to a euro-era high at 7.52% after news that Catalonia will be joining the list of regions in the country that will be tapping the bailout fund.

Attention is also turning back to Greece this week as the country's creditors -- including the European Central Bank, International Monetary Fund, and the European Commission -- will be visiting the troubled nation to determine the fiscal state of the country. Greek Prime Minister Antonis Samaras pre-empted this determination a little yesterday, describing the situation as that of the Great Depression in the 1930s.

Unsurprisingly the Spanish market is among the worst-hit today, due in main to sharp losses in the country's banking sector, although some declines in heavily weighted German stocks have the DAX (INDEX: ^GDAXI  ) the worst-performing benchmark index, down 3.1%.

As always, the following price moves are based on this morning's European trading.

Banks and financials are predictably among the sectors suffering today as fear surrounding the sovereign-debt crisis worsens. Spanish majors are leading the downward spiral on the back of euro-era-high bond yields.

With this, Banco Santander (NYSE: SAN  ) is one of the country's hardest-hit majors, down almost 3% after the bank's U.K. arm said today that it will be joining six other banks under investigation by the Financial Services Authority, looking at potential breaches of financial rules surrounding the selling of interest rate swaps to small businesses.

Elsewhere, Deutsche Bank (NYSE: DB  ) is suffering major losses today, down more than 4% after it said it would be setting aside as much as $1 billion for costs that may arise during the LIBOR-fixing investigation. On top of putting a dollar figure on the bank's potential costs associated with the scandal, the announcement is also causing speculation around its involvement in the fixing of LIBOR.

In other sectors, French supermarket operator Carrefour (OTC: CRRFY.PK) is down 4.4% in Paris after it confirmed that it and joint-venture partner New Europe Property Investments have secured a loan with from Romanian bank BDR-Groupe to help fund 40% of its planned 65 million euro investment in a new shopping center in the South Romanian city of Ploiesti.

The remaining 60% of the required finance will be funded directly from Carrefour and New Europe, while the 26 million euro loan will be used to allow them to complete the project by November this year.

The one positive story coming from the continent today is Koninklijke Philips Electronics (NYSE: PHG  ) , which has jumped more than 4.2% after it reported better-than-expected earnings results this morning. Investors were pleasantly surprised by the company's announcement of increased sales of hospital equipment and energy-efficient light bulbs.

As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap. If you want to know why Buffett has bought into Europe, this special Motley Fool report -- "The One European Share Warren Buffett Loves" -- reveals everything, including the price he paid. You can download the report today for free. But hurry -- the report is available for a limited time only.

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Karl Loomes does not own any share mentioned in this article. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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