European stocks opened firmly in the red Monday following a cautious session in Asia as investors focused on a raft of merger and deal activity and adjusted currency positions in advance of a near-settled rate hike from the U.S. Federal Reserve.
The region-wide Stoxx 600 Europe Index fell 0.75% to 372.42 in the opening 45 minutes of trading but still remained within shouting distance of its 52-week highs as bank shares weighed on benchmarks around Europe. Germany's DAX index was the standout decliner, falling 0.65% with the help of a steep -- but by no means catastrophic -- selloff for Deutsche Bank AG (DB)
Deutsche Bank fell 5.5% in Frankfurt to €18.20 each after Europe's biggest bank confirmed it will raise around €8 billion ($8.5 billion) in capital from shareholders and plan the partial sale of its asset management business.
The stock, however, has been one of the best performing bank shares in Europe in the second half of 2016, rising more than 78% from its all-time low in September and gaining more than 38% since the U.S. elections in November compared to a 12.18% advance for the Stoxx 600 Europe Banks Index.
France's CAC-40 was also in focus, with its 0.5% slide overshadowed by a solid 2.9% advance for PSA Pegout SA (PEUGF) , which said Monday that it has purchased General Motors' (GM) Opel subsidiary and the captive financing units of the carmaker's European brands for a total of €2.2 billion.
Britain's FTSE 100 was also active with merger news as the benchmark slipped 21.5 points, or 0.3%, despite gains for Aberdeen Asset Management (ABDNY) and Standard Life (SLFPY) following thier £11.5 billion ($13.5 billion) all share tie-up that will create Europe's second-biggest asset manager.