While the MSCI Europe fell by 13.1% in the four weeks to October 8th the MSCI Europe Financials index lost 21%. On a global level the MSCI World fell by 10.6% while the MSCI World Financials index fell by 14.9%.
The cautious optimism that looked ready to emerge just a month ago seems to have virtually disappeared. Falling share prices are hurting bank revenues worldwide. Few companies ar
e managing to escape this negative earnings trend. Financials have lost their reputation as a defensive play for investors.
Optimistic voices for the sector have fallen silent. This may be an opportunity for bold contrarian investors. Numerous companies are trading at unprecedented levels. But this does not mean they cannot fall further.
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