European stocks mostly drop on bank contagion fears

European stock markets mostly fell at the open on Tuesday, as investors fretted over contagion fears after the collapse of two US lenders, AFP reported.

The failure of Silicon Valley Bank (SVB) on Friday, followed by Signature Bank days later, has sent shockwaves across trading floors worldwide.

In initial deals, London’s benchmark FTSE 100 index fell 0.6 percent to 7,503.85 points compared with Monday’s close.

HSBC topped the fallers board, sliding 2.5 percent one day after it agreed to buy SVB’s UK division.

In the eurozone, the Paris CAC 40 index retreated 0.2 percent to 7,001.31, with Credit Agricole dipping 1.4 percent in value.

Frankfurt’s DAX, however, rose nearly 0.1 percent to 14,968.48, but Commerzbank dipped 0.8 percent.

Asian indices sank Tuesday, with the region’s lenders bearing the brunt of the selling.

“Bank shares globally continued to feel the reverberations from the fallout from the Silicon Valley Bank issue, with general sentiment weakening as a result,” said Richard Hunter, head of markets at Interactive Investor.