By Steve Goldstein
Shares of Europe’s top banks dropped on Monday, after the publication of reports alleging they kept doing business with customers they suspected of money laundering and other wrongdoing.
The report, led by BuzzFeed News and including other media outlets around the world, was on the basis of what are called suspicious activity reports filed by the banks to the U.S. Treasury, that had been gathered for Congressional investigators to look at President Donald Trump’s 2016 campaign. The banks by law aren’t allowed to comment on the SARs they file.
Deutsche Bank /zigman2/quotes/207242873/delayed XE:DBK +1.88% , Standard Chartered /zigman2/quotes/200125072/delayed UK:STAN +0.53% , Barclays /zigman2/quotes/208409333/delayed UK:BARC +0.93% , Commerzbank /zigman2/quotes/207286669/delayed XE:CBK +3.16% , Danske Bank /zigman2/quotes/209678580/delayed DK:DANSKE +1.68% and HSBC Holdings /zigman2/quotes/203901799/delayed UK:HSBA -0.23% were all named in the report, as were several U.S. banks. Deutsche Bank shares fell 9% after it accounted for a majority of the suspicious activity reports in the BuzzFeed trove, and allegedly, Bank of America appealed to Deutsche Bank’s chairman at the time to take action.
HSBC closed at its lowest level since Oct. 5, 1998.
The broader Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.35% fell 3.2%, and the major regional indexes were slammed too. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.92% fell 4.4%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.27% fell 3.7% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.08% lost 3.4%.
U.S. stocks /zigman2/quotes/210599714/realtime SPX +0.47% opened lower as well.
The death of Supreme Court associate justice Ruth Bader Ginsburg may have market implications, as what is expected to be a hotly contested nomination battle for her replacement could further roil Washington, D.C., which has yet to agree on a new stimulus package or funding beyond the end of September.
“The fight between the President and Congressional Democrats on whether to fill the vacant seat now or wait until after the election is expected to lead to more delays in reaching a middle ground on a new fiscal package. Hence, we would expect that the much-needed stimulus will be pushed back until after the U.S. elections,” said Hussein Sayed, chief market strategist at FXTM.
Travel stocks in Europe were pressured on worries over the region locking down in response to a new wave of coronavirus cases. U.K. Prime Minister Boris Johnson will address the House of Commons on Tuesday to discuss COVID-19. British Airways owner International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG +6.85% tumbled to an eight-year low, and Ryanair Holdings /zigman2/quotes/202851567/delayed UK:RYA +1.27% also fell sharply
Food delivery service Just Eat Takeaway /zigman2/quotes/201653805/delayed NL:TKWY -1.93% , and mealkit preparation firm HelloFresh /zigman2/quotes/203376622/delayed XE:HFG -5.68% , gained on the lockdown speculation.
Shares of engine maker Rolls Royce /zigman2/quotes/203646520/delayed UK:RR +3.18% dropped 11%, after saying it was considering raising up to £2.5 billion in new equity capital.
United Internet /zigman2/quotes/207312388/delayed XE:UTDI -1.19% shares tumbled 24%, after Telefónica Deutschland /zigman2/quotes/206278119/delayed XE:O2D +1.49% said in negotiations that it would hike wholesale costs. United Internet said it has appealed to the European Commission over the matter.