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European Shares Tumble As Lira Crisis Spreads

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European stocks fell sharply on Friday as a banking crisis in Turkey coupled with lingering worries over a trade war between the world's two biggest economies dent demand for riskier assets.

The Turkish lira tumbled more than 14 percent in early trade to hit a new low amid a deepening rift with the United States and intensifying worries about the state of the economy.

The pan-European Stoxx Europe 600 index was down 0.9 percent at 386.37 in late opening deals after closing up 0.1 percent on Thursday.

The German DAX was down as much as 1.7 percent, France's CAC 40 index was losing 1.3 percent and the U.K.'s FTSE 100 was declining 0.7 percent.

Spanish lender BBVA slumped 4.2 percent and Italy's UniCredit tumbled 3.4 percent on worries about the contagion effects of a dramatic fall in the Turkish lira.

Commerzbank, Deutsche Bank and BNP Paribas lost 2-4 percent after the European Bank reportedly expressed concerns over the impact of a weak Turkish lira on European banks.

Miners Anglo American, Antofagasta and Glencore were down about 2 percent while energy firms BP Plc, Tullow Oil and Total SA fell between 0.7 percent and 1.5 percent.

Biotechnology firm Novozymes declined 2.8 percent after its second-quarter results came in below expectations.

Budget carrier Ryanair Holdings declined 1.8 percent after grounding 400 flights amid a coordinated 24-hour workers strike.

Diageo was little changed after announcing it would start buying back up to
1.4 billion pounds ($1.79 billion) of its shares until Jan. 31.

In economic releases, U.K. economic growth doubled in the second quarter driven by stronger growth in both services and construction sectors, first quarterly estimate from the Office for National Statistics showed.

Gross domestic product rose 0.4 percent, matching expectations and faster than the 0.2 percent expansion seen in the first quarter.

U.K. industrial production also expanded in June after falling for three straight months. Output climbed 0.4 percent month-on-month, reversing a 0.2 percent fall in May. This marked the first increase in four months.

France's industrial and manufacturing output rebounded in June, driven by a recovery in petroleum output.

by RTTNews Staff Writer

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