Tuesday saw a decline in European markets as Italian banks came under pressure following the cabinet’s approval of a 40% windfall tax on lenders, while Germany’s stubborn inflation reading and China’s dismal trade data further dampened risk sentiment.
European stocks dip: The pan-European STOXX 600 index was down 0.3% as of 07:07 GMT. Italian banks including Intesa Sanpaolo and UniCredit experienced a more than 5% decline after Deputy Prime Minister Matteo Salvini stated that the 40% tax on banks’ additional profits will fund initiatives like a smaller tax wedge, tax reductions, and financial assistance for those with first-time home mortgages.
After rating agency Moody’s downgraded credit ratings for numerous small- to mid-sized US banks and warned that it may downgrade some of the biggest lenders in the US, Italy’s banking-heavy FTSE MIB fell 1.4% and European banks fell 1.8%.
After data revealed that July’s inflation rate lowered to 6.5%, which was in line with predictions, the DAX index in Germany dropped 0.4%.
Data revealed that imports and exports in the second-largest economy in the world declined considerably quicker than anticipated in July, jeopardising growth forecasts and increasing pressure on Beijing to offer more stimulus. As a result, China-exposed miners and automakers saw losses.
After disclosing that its first-half earnings had been halve, the multinational miner Glencore witnesse an almost 3% decline in its stock.