Stocks Close Lower ahead of Long Weekend
European stocks closed in the red Thursday, with investors eager to close positions ahead of the long Easter weekend and after a profit warning from Credit Suisse.
Major indexes trimmed some of their losses in the afternoon after the Philadephia Fed index, an indicator gauging the health of the U.S. economy, dropped less than expected.
But shares were pushed lower by a major selloff in gold and oil as well.
"At the moment we're going through a very vicious de-leveraging cycle," James Barty, principal at Arrowgrass Capital Partners, told "European Closing Bell."
"Risk premiums are very high, and investors are not focusing on corporate fundamentals. The bleeding in the financial sector will have to stop and economic growth will have to return before we see any serious rally in stocks," Emmanuel Morano, head of equity management at La Francaise des Placements, in Paris, told Reuters.
"In that context, companies on which we have strong visibility are more attractive," he said.
Crude oil and gold fell heavily on concerns about the health of the world economy and with investors selling commodities to get cash.
Falling commodities dragged the Dow Jones STOXX basic resources sector index down more than 4 percent.
Financial woes came back to the fore as Credit Suisse cut the value of its asset-backed securities by $201.4 million, adding it is unlikely to be profitable in the first quarter due to big debt writedowns.
Shares were down more than 2 percent after falling by more than 9 percent during the day, but the banking sector ended nearly 1 percent up.
Also in the financial sector, Germany's Allianz said it expects further writedowns in the first quarter and said it can not confirm current targets due to increasingly challenging market conditions.
Troubled German lender IKBsaid it received another injection of taxpayer money do to further expected writedowns on a portfolio of risky assets it was struggling to sell.
It's main shareholder German state development bank KFW will pump $707.4 million into the lender in the form of a loan.
But credit fears did not dissuade private equity firm Nordic Capital from making a $1.75 billion offer for top Nordic IT services company TietoEnator, sending shares more than 40 percent higher.
Also in Helsinki, paper maker Stora Enso said newspaper and book paper prices would fall this year and warned first-quarter profit would be flat, citing high wood costs, according to Reuters. Shares closed down more than 2 percent.
UK pest control to parcel delivery group Rentokil's shares were up over 17 percent after it announced major restructuring plans, including the departure of chief executive Doug Flynn, in an attempt to improve the company's performance after it issued two profit warnings the previous year.
-- Reuters contributed to this report