The UK market is in negative territory in afternoon trading Monday, as results of the stress tests on European banks failed to win investor confidence. Banking stocks are under pressure. Asian markets were mostly in the red and U.S. index futures are lower.
The European Banking Authority's stress tests showed late last week that eight of 90 banks in Europe failed, with a combined capital shortfall of 3.5 billion euros. The benchmark for the test required banks to have a 5 percent Core Tier 1 Ratio over the two-year horizon of the exercise.
The tests were carried out to assess the resilience of banks if it had to face another financial crisis. Nevertheless, all the banks from Italy, Germany, France, the U.K. and Ireland that participated in the exercise came through the stress test.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 1.47 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 1.15 percent.
The FTSE 100 began trading at 5,843, flat with the previous close, and has been trading below the flat line. The index is currently losing 0.95 percent.
Lenders Barclays, Lloyds Banking Group and Royal Bank of Scotland are declining over 3 percent each.
Miners Anglo American, Antofagasta, BHP Billiton and Rio Tinto are notably lower. Fresnillo is adding 1.85 percent as gold prices are skyrocketing.
Glencore is losing 0.9 percent. The commodities trader said its unit Glencore International AG has agreed to buy a 70 percent interest in Marcobre S.A.C. from Hong Kong-based CST Mining Group Limited for $475 million in cash.
Imperial Tobacco is rising modestly, reportedly on a broker upgrade.
Outside the main index, Thomas Cook is modestly up after the travel company announced a one year extension of its committed bank facilities to May 2014.
Elsewhere in Europe, the German DAX is falling 1.08 percent and the French CAC 40 is retreating 1.19 percent. Switzerland's SMI is receding 1.27 percent.
Across Asia/Pacific, many major markets ended below the flat line. Australia's All Ordinaries slipped 0.06 percent, China's Shanghai Composite Index dipped 0.12 percent and Hong Kong's Hang Seng dropped 0.32 percent.
In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow rose 0.3 percent, the Nasdaq jumped 0.1 percent and the S&P 500 climbed 0.6 percent.
In the commodity space, crude for August delivery is sliding $0.36 to $96.88 per barrel, while August gold is adding $10.4 to $1600.5 a troy ounce.
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