European stocks slid more than 3% on Monday and shares of the European companies extended losses into Tuesday trading as investors are showing concerns over rising coronavirus infections.
In addition, the allegations that banks are involved in money-laundering added to the stock market selloff. Banks and travel companies are among the biggest losers.
The reports hinted that banks kept doing business with customers that are involved in wrongdoings and money-laundering practices. The report shows that several European banks have helped in moving illegal money over the last decade.
In particular, the report identified Hong Kong-listed Standard Chartered and HSBC for wrongdoings. The stock price of both banks fumbled at a mid-single-digit rate on Monday. European stocks fell for the third straight day in a row.
Commenting on allegations Standard Chartered said: “The reality is that there will always be attempts to launder money and evade sanctions” and that it took its “responsibility to fight financial crime extremely seriously.”
Moreover, the reports of the massive increase in virus infections weighed on investor’s sentiments. The top U.K. scientists warned that virus infections could reach 50000 levels a day in October if the country fails to take appropriate actions. The situation is similar in Europe as the World Health Organization has already issued a warning over the second coronavirus wave.
The shares of travel and leisure companies reported big losses on virus concerns. Shares of British Airways owner International Airlines Group plunged to the lowest level in the last eight years while stock prices of other airlines are also struggling to gain upside momentum. Wall Street and Asian stocks are also in red amid virus-related worries.
“We suspect equities would fall sharply and indiscriminately, similar to what happened in February-March or in June … if the rise in new cases in Europe seriously undermined the global economic recovery,” said Simona Gambarini, markets economist at Capital Economics.