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 DBK, -7.06%, Standard Chartered STAN, -4.98%, Barclays BARC, -5.71%, Commerzbank CBK, -4.01%, Danske Bank DANSKE, -2.25% and HSBC Holdings HSBA, -5.24% were all named in the report, as were several U.S. banks. Deutsche Bank 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.
The broader Stoxx Europe 600 SXXP, -2.75% fell 2.7%, with the losses for HSBC proving to be an anchor on the FTSE 100 UKX, -3.31%, which dropped 3.3%. The German DAX DAX, -3.16% and French CAC 40 PX1, -3.13% also fell.
U.S. stock futures ES00, -1.66% fell, with futures on the Dow Jones Industrial Average YM00, -2.01% losing 579 points. Last week, the technology heavy Nasdaq Composite COMP, -1.07% fell 0.6%, while energy and industrial stocks rose.
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. British Airways owner International Airlines Group IAG, -11.02% and Ryanair Holdings RYA, -6.00% fell sharply.
Food delivery service Just Eat Takeaway TKWY, +1.35%, and mealkit preparation firm HelloFresh HFG, +4.26%, gained on the lockdown speculation.
Shares of engine maker Rolls Royce RR, -7.91% dropped 8%, after saying it was considering raising up to £2.5 billion in new equity capital.
United Internet UTDI, -25.53% shares tumbled 26%, after Telefónica Deutschland O2D, -1.66% said in negotiations that it would hike wholesale costs. United Internet said it has appealed to the European Commission over the matter.