European indices crashed hard on Monday as concerns about the financial market continued. The DAX index, plunged by more than 2.2% to a low of €15,067, the lowest level since January 31st. It has crashed by more than 3.7% from its highest level this year.
Commerzbank, Deutsche Bank lead losses
German banks led the losses in the DAX index as investors remained concerned about the health of the financial industry. Commerzbank, which recently re-entered the blue-chip index, crashed by over 10%. It was followed by Deutsche Bank, whose shares plunged by over 14%.
The biggest concern is that banks are not doing well. Last week, we saw the collapse of Silicon Valley Bank, a leading company that focused on the technology sector. As I wrote earlier on in this article, HSBC agreed to buy Silicon Valley Bank’s UK business for one pound.
Other European banks also retreated. In the UK, Lloyds share price collapsed by more than 4.5% while Unicredit stock declined by almost 7%. Other European banks like Credit Suisse, Barclays, and Santander also continued falling.
Porsche stock plunges
The other top underperformer in the DAX index was Porsche, the luxury car company. Porsche share price crashed by over 5.6% even after the company published strong financial results. The company hopes that its operating margin will be between 17% and 19%. It also expects that its revenue will soar to about 42 billion euros. Porsche’s announced a dividend of about 911 million euros.
Other companies that dragged the DAX index were Allianz, Siemens, Vonovia, and Munich Re among others. The top performers in the index like Deutsche Post, Beiersdorf, Bayer, and Symrise were also in the red.
The next key catalyst for the DAX 40 index will be the upcoming European Central Bank (ECB) decision scheduled for Thursday this week. Analysts believe that the central bank will likely pause or hike rates by just 0.25% in this meeting.
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