By Steve Goldstein
European stocks slumped on Monday, responding to a ratcheting up on sanctions against Russia as the Russian invasion of Ukraine continued.
The Stoxx Europe 600 fell 1.6%, as the financial sector reeled from the news the U.S., European Union and the U.K. agreed to block some Russian banks from the SWIFT messaging system.
The German DAX dropped 2.5%, the French CAC 40 lost 3% while the U.K. FTSE 100 lost 1.6%.
Futures on the Dow Jones Industrial Average fell 510 points.
"The free world is uniting against Putin's war -- and seems ready to pay a price for its resolve. The exclusion of major Russian banks accounting for 70% of the Russian banking market from the SWIFT system to make payments and the possibly even more far-reaching attempt to limit the use of Russia's foreign exchange reserves of some $630bn can cause problems for financial and non-financial companies outside Russia," said Holger Schmieding, chief economist at Berenberg Bank in London.
Financials were hammered. ING , Unicredit and Societe Generale each dropped 11%.
Austria's Raiffeisen Bank International , which earned about a third of its profits from Russia last year, skidded 15%.
BP shares fell 7% as the oil giant said it's taking a $25 billion charge to exit its 19.75% stake in Rosneft. Renault , the owner of Russian carmaker Avtovaz, dropped 8%.
Anglo-Russian gold miner Polymetal International dropped 52%. Nokian , which makes most of its tires in Russia, dropped 21%.
Defense stocks soared as Germany said it will set up a special EUR100 billion fund to upgrade its armed forces. Rheinmetall shares jumped 32%, BAE Systems rose 14% and Leonardo rose 13%.
The yield on the 10-year German bund fell 6 basis points to 0.17%.
While the Russian stock market had not opened, U.K.-listed shares of companies including Sberbank and Lukoil plunged. Russia's central bank jacked up its key interest rate to 20% from 9.5%.
(END) Dow Jones Newswires
02-28-22 0438ETCopyright (c) 2022 Dow Jones & Company, Inc.