Euro Stocks End Lower; Banks Fall
European stocks closed lower on Monday, weighed down by banks after Lehman Brothers forecast a big quarterly loss and set a capital increase, and as talk swirled of further losses at Swiss bank UBS.
The FTSEurofirst 300 index of top European shares unofficially closed 0.3 percent lower at 1,279.62 points.
Banks were pummeled by results from Lehman that fell far short of expectations and by a 3.3 percent fall in UBS after a media report suggested the lender may post further losses in the second quarter.
British banks were particularly weak, with Royal Bank of Scotland falling 4.8 percent after it sold shares not subscribed for in its record rights issue for 230 pence apiece.
Barclays fell 5.7 percent and HBOS slumped 7.2 percent.
Analysts said they would be staying away from banks for now.
"We will be investing in banks in the autumn at the earliest," said Giuseppe Amato, market strategist at Lang & Schwarz in Duesseldorf, Germany.
"Lehman has now confirmed a capital hike which is $1 billion larger than the market talked about yesterday and the loss was also larger. We can see that the banks have no cushions anymore. There is a risk to earnings from lower volumes and also from having to revalue their holdings," Amato added.