The European markets ended Monday's session in the red after the eurozone and the International Monetary Fund agreed on a 10 billion euros controversial bailout package for Cyprus Saturday morning. Financial stocks were among the hardest hit at the start of the new trading week. The markets pared their losses in late trading, after the U.S. markets began to recover from their weak open.
Depositors in Cypriot banks will have to pay a one-time tax on their savings, marking the first bailout for any eurozone country in which depositors will directly lose money. Holders of bank accounts with less than 100,000 euros will be taxed at 6.75 percent, and those who are having money more than that level will be taxed at 9.9 percent, raising an expected 5.8 billion euros for the Mediterranean island.
The Cypriot Parliament has reportedly canceled today's vote on bailout. It will be held on Tuesday. Meanwhile, reports also indicated that eurozone is mulling modification of Cyprus conditions.
Meanwhile, Moody's Investors Service on Monday said the Cyprus bailout may hurt the ratings of European banks. The losses are credit negative for other European bank creditors also, as it limits systemic support for bank creditors in the region, Moody's said. The bailout reduced the immediate risk of a debt restructuring in Cyprus.
The Swiss economy is forecast to grow at a slightly faster than estimated pace next year on rising demand from foreign markets, the State Secretariat For Economic Affairs said Monday.
The economy is projected to grow 2.1 percent in 2014, the Expert Group said in its Spring Forecast, up from 2 percent estimated in December. For 2013, it expects relatively moderate 1.3 percent growth, unchanged from its Winter forecast.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.71 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.20 percent.
The DAX of Germany dropped by 0.40 percent and the CAC 40 of France fell by 0.48 percent. The FTSE 100 of the U.K. decreased by 0.36 percent and the SMI of Switzerland finished down by 0.43 percent.
In Frankfurt, Deutsche Bank fell by 2.04 percent and Commerzbank lost 0.25 percent. Commerzbank was downgraded to ''Neutral'' from ''Outperform'' at Credit Suisse.
Car parts maker ElringKlinger dropped by 3.20 percent. Berenberg reinitiated the stock with a ''Hold'' rating.
Lufthansa increased by 2.38 percent. UBS upgraded the stock to ''Buy'' from 'Neutral.''
Siemens finished up by 0.86 percent, after a broker upgrade at Merrill Lynch.
In Paris, Societe Generale dropped by 3.34 percent. BNP Paribas and Credit Agricole decreased by 2.82 percent and 3.16 percent respectively.
Vivendi was downgraded to ''Neutral'' from ''Buy'' at Nomura. The stock fell by 1.80 percent.
STMicroelectronics advanced by 5.18 percent. The chipmaker and its joint venture partner Ericsson have decided to split up their unprofitable joint venture ST-Ericsson.
In London, Barclays declined by 4.41 percent. Royal Bank of Scotland and Lloyds Banking lost 3.44 percent and 1.33 percent respectively.
Marks & Spencer surged by 6.87 percent, after reports that a Qatar wealth fund may submit a bid to acquire the company.
Legal & General has agreed to buy a 46.5 percent equity stake in home builder CALA Group Ltd from Lloyds Banking. Legal & General dropped by 0.46 percent.
Eurasian Natural Resources sank by 7.18 percent, on reports that asset writedowns will be disclosed this week.
Berenberg downgraded Aviva to ''Hold'' from ''Buy.'' The stock fell by 0.89 percent.
Prudential lost 3.38 percent, following a broker downgrade.
Berkeley Group rose by 3.09 percent. The company is confident of meeting full year expectations.
Eurozone's merchandise trade deficit in January narrowed from last year as exports increased at a faster rate than imports, giving rise to hopes that the region's economy is back on the recovery path. On an unadjusted basis, January's net trade resulted in a deficit of EUR 3.9 billion, which was markedly lower than the EUR 9.1 billion shortfall seen a year earlier, Eurostat said Monday.
The deficit was forecast to fall to EUR 3.5 billion. In December, the balance was a surplus of EUR 10.8 billion, after a downward revision from EUR 11.7 billion.
Italy's merchandise trade shortfall decreased significantly from last year in January, helped by a notable gain in exports and a decrease in imports, data released by statistical office Istat showed Monday. The trade deficit narrowed sharply to EUR1.62 billion in January from EUR4.6 billion in the same month a year earlier.
The squeeze on household finances in the United Kingdom eased in March, helped mainly by an increase in earnings of private sector employees, data from a survey by Markit Economics showed Monday.
The seasonally adjusted household finance index increased to 39.3 in March from 37.7 in February, but remained well below the no-change 50 mark that separates growth from contraction. The improvement mainly reflected an increase in earnings of private sector employees, which rose for the first time in two-and-half years.
Homebuilder confidence in the U.S. unexpectedly decreased in the month of March, according to a report released by the National Association of Home Builders on Monday, with the homebuilder confidence index falling for the second straight month.
The report showed that the NAHB/Wells Fargo Housing Market Index dipped to 44 in March from 46 in February. The drop came as a surprise to economists, who had expected the index to inch up to 47.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.