European Bank Shares Hit by Bond-Market Turbulence and France Concerns
Banks were among the weakest sectors in Europe as a sovereign-bond selloff raised questions about financing and economic growth.
European stocks fell on October 8, and Reuters reported bank shares at their weakest levels in more than three months. Rising borrowing costs and concerns about the public-finance outlook in France contributed to the pressure.
Banks may benefit from certain forms of higher interest rates, but a rapid rise in sovereign yields can also erode the market value of bonds, raise funding costs and put borrowers under strain. That is why the direction of yields alone does not tell investors whether bank shares should rise.
France's CAC 40 and regional banking shares offer related but different perspectives on the same risk. Investors should distinguish an individual bank's earnings and capital levels from broad concerns about government budgets. The dates and figures here describe the reported European session.
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