European shares opened lower Thursday, pulled down by banks after HSBC fell hard. The bank’s plan to privatise Hong Kong’s Hang Seng Bank may mean a big shift – the deal is valuated around HK$106 billion (about $13.6 billion).
The pan‑European STOXX 600 hovered near its recent high, only 0.1 % down at 573.4 points.
Shares of HSBC dropped roughly 6.6 %, while the wider banking index lost about 1.2 %. Lloyds Banking Group fell 3.4 % as it appears likely to need extra cash to cover costs for motor‑finance customers.
Germany’s Gerresheimer slumped 10.7 % after it cut its annual outlook – a sharp move for the packaging‑and‑medical‑gear maker.
In contrast, the basic‑resources sector rose 1.4 %, tracking higher copper and iron‑ore prices. The technology index ticked up 0.4 %, led by France’s Alten, which announced it will separate the chairman and CEO roles as part of a governance overhaul.
Burberry gained 2.4 % after Deutsche Bank upgraded the luxury label from “hold” to “buy”.
Overall the market stayed close to its record, with mining and tech gains helping to limit the losses made by the banking‑heavy drop.
On the FX front, the US dollar is continuing its rally this week, reaching a two-month high, mainly because two other major currencies, the euro and the Japanese yen are struggling.
The euro has been weak following a political crisis in France, where the Prime Minister and his government resigned earlier this week. Although President Emmanuel Macron plans to quickly name a new Prime Minister, the political uncertainty has weighed on the currency.
The euro dropped to 1.1609, its lowest level since late August, and is down nearly 1% for the week.
The Japanese yen is also under pressure. Its weakness comes after a conservative, Sanae Takaichi, was chosen to lead Japan’s ruling party, which is expected to support policies that keep interest rates low. The yen fell to 153.07 per dollar levels not seen since February and has dropped over 3.8% this week.
These significant declines in the euro and the yen have made the US dollar more appealing to investors, causing the US Dollar Index to climb 0.20% to 99.038.
Currency Power Balance