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European shares declined for a sixth day as investors fretted over global growth prospects.
For European investors trying to assess just how bad sentiment is right now, consider this: the last time stocks were this low, the region had just suffered its longest-ever recession and corporate profits were about to shrink a third year. Signs of an improving economy haven’t deterred bears from punishing the Euro Stoxx 50 Index in a global rout, sending it to its lowest close since September 2013. Concerns ranging from oil to bad loans held by Italian banks have cast a shadow on the region’s recovery, with European stocks failing to lure bargain hunters even though they trade at their biggest discount in more than a year relative to U.S. shares. The pessimism is a far cry from where we were at the start of the year. What’s happened since the start of the new year are a deepening oil rout, intensifying concern over China’s slowdown and growing worries about the region’s lenders — the biggest decliners this year. Deutsche Bank AG, which posted its first annual loss since 2008, has plunged to a record, while Italy’s Banca Monte dei Paschi di Siena SpA has tumbled 58 percent. The lender is seeking a buyer to shore up its finances and reported a quarterly loss.
By Bloomberg News (Bloomberg)