Investor sells stakes in German lenders

LONDON (Reuters) – European markets plunged on Tuesday morning as traders monitored high-volume sales in the banking sector, looking ahead to key central bank meetings and US inflation prints.

The pan-European Euro Stoxx 600 index was down 1.2% in early deals, with the German DAX down 1.8% and the banking sector down 2.3%. Reports on Monday indicated that an undisclosed investor was selling large stakes in Germany’s largest lenders, Deutsche Bank and Commerzbank.

Shares of Deutsche Bank were down 9.5% and Commerzbank 8.6%. The former said in the statement that it “remained confident in our strategy.” The reports said the sale amounts to 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank – more than 5% of the two German banks.

Nigel Bolton, a co-CIO at BlackRock, would not comment on news about individual stocks, but said traders should keep an eye on large investor streams.

“If you look at the stock markets at the moment, I think there are some attractive areas, in fact, European banks now look incredibly cheap,” he told CNBC’s “Squawk Box Europe.”

“And in an environment where you’re starting to see increasing rates, as long as you do not think we’ll be moving to some kind of recession in a year or two, they may actually look relatively attractive.”

US inflation

Global investors will also read the US Consumer Price Index for March on Tuesday and the Producer Price Index on Wednesday for indications on how the Federal Reserve will need to act to curb inflation.

Earnings season also begins this week in the state, with banking giants JPMorgan, Goldman Sachs, Wells Fargo, Citi and Morgan Stanley all reporting.


In Europe, investors will also be watching developments in Ukraine. Russia’s invasion of the country has caused volatility in oil and other commodity markets, which in turn has disrupted equities. Overnight, British Foreign Secretary Liz Truss said her government was working “urgently” to verify details of a suspected chemical weapons attack in the besieged Ukrainian city of Mariupol.

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European Central Bank policymakers will meet in Frankfurt on Thursday to discuss their next monetary policy move, given the difficult task of weighing rising consumer prices against pressure on Ukraine’s economic growth.

On the data front, UK employment figures showed that the country’s unemployment rate fell to its lowest level since 2019. A German ZEW Economic Sentiment index is available around 10am London time.

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– CNBC’s Elliot Smith contributed to this article.

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