European shares are at a monthly low after a significant drop in the US – News

The pan-European STOXX Europe 600 index lost about 1.6 percent shortly before 10:00 a.m. CET on Friday and was below 453 points. The main index of the London Stock Exchange FTSE 100 also depreciated about 1.6 percent at the same time and moved below 7,756 points.

Bank shares traded in London lost more than four percent and are at an eight-week low. Financial houses HSBC, Barclays, Lloyds and Natwest Group wrote off roughly four to six percent in the morning.

According to some analysts, behind Thursday’s drop in the share prices of US banks is a reaction to the shutdown of the cryptocurrency bank Silvergate Capital. The effort of the SVB Financial bank to quickly obtain funds by selling shares probably also had an influence. Markets fear this is the start of a much bigger problem in the economy.

At the same time, statistics showed on Friday that the British economy performed better than expected at the beginning of the year. Gross domestic product (GDP) rose 0.3 percent in January, which could prompt the Bank of England to raise its key interest rate again this month.

As in Britain, banking stocks are underperforming in continental Europe on Friday. The sub-index of banks lost more than four percent in the morning, which was the sharpest one-day drop since the beginning of June. Shares of Germany’s Deutsche Bank depreciated by more than seven percent.

According to analysts, the problems of American banks underline the vulnerability of the banking sector. Its problems and the subsequent financial crisis a decade ago, together with the economic effects of the pandemic, led central banks and governments to massive money printing, the effect of which they are now trying to moderate.