European stocks returned to negative territory on Tuesday after experiencing market gains for five straight days.
The benchmark Stoxx Europe 600 index (SXXP, -0.17%) closed the day 0.02% off at 398.75 following a Monday end of day reading at its highest level since 22 July.
Banking stocks across Europe, led by the Greek banks, were the hardest hit on Tuesday, with energy stocks also taking big losses on the day, all playing a part in the downward movement of the pan-European index.
The fragile state of the Greek economy was evident as the country's Athex Composite index (GD, -1.22%) declined by 1.2% to 659.94, its lowest level since September 2012. The market re-opened for trading on Monday after it had been closed by the Greek government for most of July while negotiations were taking place on the terms of a bailout by its creditors.
Further evidence of the parlous state of the Greek financial system was reflected as bank stocks fell, led by Piraeus Bank SA (TPEIR, -30%) and Alpha Bank AE (ALPHA, -29.65%), both which plunged by 30%, the daily stop limit. Slightly less affected was the National Bank of Greece SA (ETE, -28.45%) which shed 28% for the day.
Stocks of other European banks that recorded losses for the day included French bank Credit Agricole SA (ACA, -10.17%) which dropped 10%, Italian banker Banco Popolare SC (BP, -2.25%) down by 2.3% and Banco Comercial Portugues SA (BCP, -2.9%) which was down 2.9% at the end of the day.
The slump in the oil price, with the global crude benchmark (LCOU5, +0.72%) dropping lower than $50 a barrel for the first time since January and the generally negative prevailing conditions in the energy sector, saw a drop in energy company share prices.
Among the shares affected on Tuesday were those of Repsol (REP, -1.57%), a loss of 1.6%, Total SA (FP, -0.67%), down 0.7% and Eni SpA (ENI, -1.00%) which dropped 1% on the day.
Oil prices recovered marginally during Tuesday with Brent picking up 52 cents to trade above $50 on London’s ICE Futures while West Texas Intermediate crude added 93 cents to trade at $46.10 a barrel.
On the positive side, shares that had significant gains included tire manufacturer Continental AG (CON, +5.93%) ,5.7% up on the back of a second quarter increase in earnings while aerospace equipment company Meggitt PLC (MGGT, +7.93%) jumped 7.9% after the company reaffirmed its full year guidance and reported an increase in first half earnings.