Sovereign Debt Worries Weigh on European Indices & Banks This Month


Although the Dollar is having its best month since May (The Dollar Index is up 4.8% this month), U.S. equity markets remain fairly mixed in November (Dow down 0.8%, S&P and NASDAQ up 0.1%) as the month draws to a close today.

But as a flurry of sovereign debt concerns continuing to plague Europe throughout the month, most major European stock indices have experienced a rough ride in November. In fact, the benchmark indices in Portugal and Spain are having their worst month since October 2008 (in the midst of the global financial crisis), Italy’s FTSE MIB is having its worst month since April 2009, while indices in France, Greece, Hungary are having their worst month since May of this year.

With only Germany being the one major exception this month, here’s a look at the declines across Europe this month.

  • Spain -13.9%
  • Italy -10.4%
  • Hungary -10.3%
  • Portugal -9.1%
  • Greece -8.3%
  • France -5.7%
  • Switzerland -2.1%
  • U.K. -1.9%
  • Ireland -1.1%
  • Germany +1.7%

As the various European markets have traded notably lower this month, so have the major European ETFs that trade in the U.S. SPDR Euro STOXX 50 , for example, is down 12.4% this month alone. Below are some of the other European ETFs.

  • iShares MSCI EMU Index (EZU), -11.2%
  • SPDR STOXX Europe 50 (FEU), -9.0%
  • iShares Trust S&P Europe 350 (IEV), -8.2%

Weighing the most on the European markets have been the banks, which are down yet again today. With another 2 percent decline today, the (small) European financials ETF (iShares MSCI Europe Financials Sectors ) is down 14 percent this month. Take a look at the many double-digit declines for European banks in November amid the debt worries in the euro-zone.

  • Bank of Ireland (IRE), -45.0%
  • Banco Santander (STD), -25.0%
  • National Bank of Greece (NBG), -24.0%
  • ING (ING), -17.7%
  • Deutsche Bank (DB), -17.2%
  • UBS (UBS), -11.4%
  • Credit Suisse (CS), -10.3%
  • Barclays (BCS), -8.5%

>> Best & Worst Performing Stocks in November '10

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