European stock exchanges fell with banking shares.

Stunning Declines in European Stock Markets

European stock markets continue to decline, led by banking stocks. As of 10:40, the Stoxx Europe 600 benchmark index is trading at 562 points, down 1.5%. Germany's DAX 40 index has fallen to 23,786 points, a drop of 2%, while the UK’s FTSE 100 index is trading at 9,290 points, down 1.6%.

Stock Changes by Country

In Italy, the FTSE MIB 30 index has decreased by 2% to 41,530 points, while Spain's IBEX 35 has dropped 0.7% to 15,516 points. In France, the CAC 40 index has fallen 0.9% to 8,120 points. These declines are attributed to the ongoing budget disagreements within the US government, which continue to heighten global market uncertainties.

Turbulence in the Banking Sector

The disclosure that some regional banks in the US, namely Zions Bancorp and Western Alliance, are facing fraud cases in certain loans has raised concerns regarding banks' credit portfolios. In this context, the VIX Index, which measures volatility in the S&P 500 Index, has reached approximately 25.31, the highest level in about six months. A similar risk perception prevails in European markets.

Declines in Banking Stocks

In particular, banking stocks in Europe have negatively affected investors' risk appetite. Shares of the German Deutsche Bank have dropped 5.6%, UK’s Barclays has decreased 4.9%, Standard Chartered has fallen 4.6%, French BNP Paribas has seen a 3.3% drop, Dutch ING Groep is down 3%, and French Societe Generale has decreased 3.8%.

Geopolitical Developments and Expectations

Geopolitical events are being closely monitored. US President Donald Trump announced that delegations from Russia and Ukraine will hold a consultation meeting aimed at ending the Russia-Ukraine War. In this context, it was announced that Trump will meet with Russian President Vladimir Putin in the Hungarian capital of Budapest.

In the financial world, Swiss-based food and beverage giant Nestle reported its third-quarter results. The company's sales increased by 3.3% year-on-year, while it announced weak sales in China. Additionally, as part of a cost-cutting program, it plans to lay off 16,000 employees worldwide.

Today, the Eurozone consumer inflation data for September and news from the ongoing IMF and World Bank annual meetings in the US are expected to be closely monitored.