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News Topical, Digital Desk : European stock markets saw sharp declines on Friday morning, as concerns about US bank woes have now reached Europe. The pan-European Stoxx 600 index opened down -2%, while major indexes in Germany, Italy, and Britain also fell sharply. The banking sector is under the most pressure, while defense and auto stocks have also seen heavy selling.

Heavy selling in banking stocks
Banking stocks have fallen sharply after the news of bad loans in regional banks of America. Stoxx Europe 600 Banks Index fell by about 2.8%. Germany's DAX and Italy's FTSE MIB both fell by more than 2%. Britain's FTSE 100 and France's CAC 40 also fell by 1.5% and 0.7% respectively. The fall in banks like Jefferies, Zions and Western Alliance in America increased the fear among the investors in Europe.

BBVA–Sabadell deal fails, different reactions in the stocks Spanish bank BBVA's hostile takeover attempt on Sabadell failed. BBVA's stock jumped by 5.7% on Friday, while Sabadell's stock fell by 6.1%. The market believes that the failed takeover has reduced the pressure on BBVA's balance sheet. Defence sector also under pressure Defence stocks also fell as there is news that US President Donald Trump and Russian President Vladimir Putin are going to meet in Hungary on the Ukraine war. Stoxx Europe Aerospace & Defense Index fell by about 3%. Although this sector had given 60% return in the entire 2025 so far, but now investors are booking profits. Shares fell by 5% due to Volvo results- Sweden's Volvo Group reported a profit of 11.7 billion Swedish kronor (about $1.3 billion) in the third quarter, which was better than expected. But the company said that weak market conditions in North and South America have put pressure on sales. Shares fell by 5.4% on Friday and are down by about 1% so far this year. Eyes fixed on inflation and growth data ECB official Martin Kocher told CNBC that the rate-cut cycle in Europe is almost at its end. According to the UK's Office for National Statistics, GDP grew only 0.1% in August. Switzerland has reduced its growth forecast for 2026 to 0.9% as Trump's tariffs have affected its exports. Pressure in Asia and America too Most markets in Asia declined, except South Korea's KOSPI and India's Sensex-Nifty. However, KOSPI touched a record high. Dow Futures fell 1%, S&P Futures 2%, and Nasdaq Futures 1.5%. Major stocks like Oracle, Eli Lilly, and Novo Nordisk also fell heavily in after-hours trading.


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