Credit concerns reach European markets as bank stocks slide 2.8%

European markets traded firmly successful the reddish connected Friday greeting arsenic concerns implicit the banking assemblage reached the region.

The Pan-European Stoxx 600 was 1.5% little astatine 8:26 a.m. successful London (3:26 a.m. ET), with each large indexes and sectors successful antagonistic territory. The U.K.'s FTSE scale was 1.5% lower, France's CAC 40 was down 0.7%, portion Germany's DAX and Italy's FTSE MIB some fell implicit 2%.

It comes arsenic spillover from the U.S. banking assemblage deed European stocks connected Friday, with the Stoxx Europe 600 Banks Index sliding astir 2.8%.

In the U.S. connected Thursday, shares of determination banks and concern bank Jefferies tumbled arsenic fears mounted astir immoderate atrocious loans lurking connected Wall Street.

Stoxx Europe 600 Banks Index

Elsewhere successful the banking sector, Spanish slope BBVA's attempted hostile takeover of Sabadell failed connected Thursday, erstwhile it failed to person shareholders to backmost the 16.32 cardinal euro ($19.1 million) bid.

BBVA shares roseate 5.7% connected Friday arsenic investors reacted to the news, portion Sabadell's fell 6.1%.

Defense stocks are besides successful the spotlight aft it was announced that U.S. President Donald Trump and Russian President Vladimir Putin volition beryllium meeting successful Hungary to sermon the ongoing warfare successful Ukraine.

The Stoxx Europe Total Market Aerospace and Defense scale was implicit 3% little connected Friday.

It marks a stark alteration for the banking and defence sectors, which person been agleam spots successful the European equities rally this year. Their respective indexes person gained astir 54% and 60% implicit the people of 2025.

On the firm front, Swedish truckmaker Volvo Group connected Friday posted marginally higher-than-expected third-quarter earnings.

The Gothenburg-based company, which manufactures trucks, buses and operation equipment, said third-quarter nett net came successful astatine 11.7 cardinal Swedish kronor ($1.3 billion), noting "difficult marketplace conditions successful North America and South America impacted income negatively." Analysts polled by LSEG had expected nett net of 8.75 cardinal Swedish kronor.

Shares of Volvo Group are down astir 1% year-to-date. They fell 5.4% successful aboriginal commercialized Friday.

Elsewhere, investors volition beryllium watching European ostentation data. Inflation has been a cardinal focal constituent among delegates astatine the IMF and World Bank yearly meetings this week. The "easing rhythm is adjacent to an extremity oregon astatine its end," European Central Bank Governing Council subordinate Martin Kocher told CNBC successful an exclusive interview.

The U.K.'s information bureau, the Office for National Statistics, released its monthly maturation figures connected Thursday, showing the system expanded by a meager 0.1% successful August.

Meanwhile, the Swiss authorities reduced its 2026 maturation forecast to 0.9% arsenic Trump's tariffs deed Switzerland's export-heavy economy.

In Asian markets, astir indexes traded little connected Friday, with the objection of South Korea's Kospi which deed grounds highs. It comes arsenic the state continues commercialized woody talks with the U.S.

U.S. banal futures edged little connected Thursday night amid a sell-off of banking stocks successful the erstwhile session. 

— CNBC's Sam Meredith and Silvia Amaro contributed to this report.