European shares slid as a US$14 billion US Department of Justice (DOJ) claim against Deutsche Bank AG and weakening oil prices dragged lenders and energy companies lower.
All but three of the 19 industry groups on the STOXX Europe 600 Index declined. US crude traded at about US$43 a barrel amid concern rising exports from Nigeria and Libya would add to a glut.
Deutsche Bank’s woes are adding to the worst week for European stocks since June, after global markets were shaken by concern central banks in the eurozone and Japan were becoming hesitant to boost stimulus. The cost of insuring corporate debt increased this week by the most in three months, commodities prices tumbled and yield curves steepened. The Bank of Japan will conclude a policy meeting on Wednesday, the same day as a US Federal Reserve decision.
“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.”
The STOXX Europe 600 Index slipped 0.7 percent on Friday, down 2.2 percent from the previous week.
Lenders fell the most of the equity gauge’s 19 industry groups, with Deutsche Bank tumbling 8.2 percent. The German lender said it was not willing to pay the claim from the DOJ to settle an investigation into its sale of residential mortgage-backed securities. Credit Suisse Group AG and Royal Bank of Scotland Group PLC slid at least 5 percent.
Energy companies were the second-worst performers after banks, while Fiat Chrysler Automobiles NV slid 2.1 percent after saying it was recalling about 1.4 million cars and trucks in the US.
The number of STOXX 600 shares changing hands was more than 70 percent greater than the 30-day average, and shares of Italy and Portugal fell the most in western Europe.
Healthcare firms posted the best performances. British private-equity company SVG Capital PLC gained 4.7 percent after saying an unsolicited bid by HarbourVest Partners LLC undervalues the firm and that it has other offers.
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