European equities opened in negative territory on Thursday, with weakness in the banking sector dragging markets lower after a sharp drop in HSBC (LSE:HSBA) shares. The decline followed the bank’s announcement of plans to privatise Hang Seng Bank. Gains in mining and tech stocks, however, helped soften the overall losses.
As of 07:11 GMT, the pan-European STOXX Europe 600 index was down 0.1% at 573.4 points but remained close to its all-time high reached the previous session.
HSBC shares tumbled 6.6% after the British bank unveiled its privatisation proposal for Hang Seng in a deal valued at HK$106.1 billion (US$13.64 billion), pushing the broader banking sector down by 1.2%.
Other major lenders also lost ground, with Lloyds Banking Group (LSE:LLOY) slipping 3.4% after warning it may need to allocate additional funds to cover compensation related to motor finance claims.
Outside of banking, Germany’s Gerresheimer AG (TG:GXI) plunged 10.7% after cutting its annual guidance, weighing further on sentiment.
By contrast, the basic resources sector advanced 1.4%, supported by rising copper and iron ore prices. Technology names gained 0.4%, led by French IT group Alten, which climbed after announcing plans to split the roles of chairman and CEO in a governance shake-up.
Luxury fashion brand Burberry (LSE:BRBY) rose 2.4% after Deutsche Bank upgraded its rating from “hold” to “buy,” providing a bright spot in an otherwise subdued session.
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