FRANKFURT: European stocks closed sharply lower Tuesday, logging its worst three-day decline in nearly three months as the euro hit a roughly nine-month high against the U.S. dollar.
Selling in bank shares following poor financial results in the sector also weighed.
The Stoxx Europe 600 SXXP, -1.66% fell 1.7% to 335.56, ending at the lowest close since April 12, according to FactSet data. No sector was higher, and basic materials SXPR, -6.33% oil and gas SXEP, -2.80% and financial SXFP, -2.19% shares fell by most. Losses for the European stock benchmark were the worst since the three-session period ended Feb. 9, according to Dow Jones research.
Euro leaps: Equities felt the pain from strength in the euro EURUSD, -0.0957% which rose to an intraday high of $1.1618 and touched above $1.16 for the first time since August, according to FactSet. The shared currency on Monday ran above $1.15 as lackluster U.S. economic data supported the view that U.S. interest rates may be held steady by the Federal Reserve. The shared currency lost strength around the time of the European market close to exchange hands at $1.1518, down from $1.1535 late Monday in New York. See more inCurrencies.
Euro strength makes goods from European exporters more expensive to holders of other currencies.
DAX down: The export-heavy German market was paying the price of the euro rally, pulling the DAX 30 index DAX, -1.94% down 1.9% to 9,926.77. That was the DAX’s first close below 10,000 since April 12.
Investors also yanked shares of some German blue-chips lower following earnings results. Deutsche Lufthansa AG LHA, -4.76% shares sank 5.1% as the air carrier said it may cut capacity to offset weak ticket prices. Meanwhile, luxury auto maker BMW AG BMW, -3.68% fell 3.8% as operating profit declined.
Banks: Most bank shares were under pressure, with Commerzbank AG CBK, -8.06% sliding 10% as first-quarter profit more than halved and as the German lender cast further doubt over its full-year outlook.
Meanwhile, UBS Group AG UBSG, -7.50% UBS, -7.66% shares gave up 7.5%, with the Swiss lender’s first-quarter profit declining sharply to 707 million Swiss francs ($741 million) from 1.9 8 billion francs.
Better-than-expected earnings for France’s BNP Paribas BNP, -1.01% weren’t enough to push the shares higher and they ended down 1%.
Indexes: France’s CAC 40 PX1, -1.59% stumbled 1.6% to 4,371.98 and Italy’s FTSE MIB FTSEMIB, -2.46% slumped 2.5% to 17.966.81. Spain’s IBEX 35 IBEX, -2.85% was down 2.9% to 8,764.90.
The U.K.’s FTSE 100 UKX, -0.90% lost 0.9% at 6,185.59.
