European Stocks Finish Mixed as Bank Worries Weigh

European stocks closed mixed under the weight of the impact of the global credit turmoil on the banking sector and with scattered good news from other sectors.

The London FTSE-100 was slightly higer, the Paris CAC-40 was flat, and the Frankfurt DAX was slightly lower. The FTSE CNBC Global 300 was slightly higher.

U.S. stocks moved higher, led by technology stocks.

A Reuters report that Deutsche Bank could suffer a 1.7 billion euros ($2.40 billion) hit to its profit when it revalues loans following the recent subprime fallout dragged banking sector shares down in Europe, with other banks caught in the rumor mill.

Economists said that the German bank was strong enough to withstand the crisis.

"We're not talking about Northern Rock, let's give them (Deutsche Bank) some credit," Ralph Silver from Towergroup told "European Closing Bell." He said profits of all German banks were likely to be hit by between 5% and 7% because of the spillover from the U.S. subprime crisis.

"It's not just Deutsche Bank but all the German banking sector - it's hard to make a profit in Germany so they went to the U.S.," Silver added. Deutsche Bank shares closed 1.7% down.

U.K. Banks Lower

Meanwhile, the future of battered U.K. mortgage-lender Northern Rock appeared bleak as three leading hedge funds planned to break-up the bank, the Sunday Telegraph reported. Shares of Northern Rock fell 10.6%.

HSBC said Friday its U.S. subprime mortgage-unit was no longer sustainable and was due to be closed. Shares of the London-listed bank fell 0.5%.

Barclays also plans to shed its sub-prime consumer loan business FirstPlus at a loss to its book value, according to the UK’s Sunday Telegraph newspaper. Shares of the British bank closed over 3.3% lower.

Another company affected by weakness in the U.S. housing market is building materials group Wolseley, which is heavily exposed to the U.S. housing sector. The company reported results "broadly in-line" with expectations, but said the outlook for fiscal 2008 remained cautious. Shares fell 4.6%.

The mining sector was Monday's bright spot, with reports that BHP Billiton will soon unveil the world's largest gold resource sending the U.K. miner's shares nearly 6% higher, compared with the sector's 3.5% rise.

On Tuesday, investors are likely to look closely at crucial U.S. data on consumer confidence and the housing sector for signs on whether an end to the credit crisis is in sight.

© 2009 CNBC.com