Shares in European banks have dropped 31 percent this year.
This is compared with a 10 percent drop in the benchmark Stoxx 600 index.
The banks are trading at less than 40 percent of the book value of their net assets.
Jon Peace, an analyst at Credit Suisse, said: “It’s going to be another difficult one — several banks have flagged this could be the worst quarter of the year.”
FOLLOW OUR LIVE UPDATES HERE:
12.30pm update: European markets continue with glum morning lows
The pan-European STOXX 600 was down 0.2% but came off early lows.
Travel & leisure dropped 2.9%, with UK-based airlines and tour operators such as TUI AG , Easyjet Plc, British Airways-owner IAG SA falling between 9.4% and 13.4%.
The broader index sank to a two-month low, further cementing its status as the worst performer in Europe this year.
Spanish stocks fell 1.3%, while the Irish stocks benchmark dropped 1.1% after airline Ryanair cut its annual passenger target by a quarter and warned a second wave of coronavirus infections could lower that further.
Lufthansa and Air France fell 6.4% and 4.0%, respectively, after Boris Johnson’s government said it was watching the situation in Germany and France closely.
Alastair George, head strategist at Edison Investment Research said: ”There’s always been this concern when lockdown measures were released that we would have a resurgence in cases and reimposition of social restriction.
“It does not just impact people going on holidays as the risk is economies have to shut down again. But that has not happened, which is why you have a measured response to the news over the weekend.”
11.45am update: The FTSE-100 index is down 10.05 at 6113.77
11.30am update: Gold soars to record high
Gold has soared to an all-time high as a result of worsening ties between China and the United States, a weakening dollar and ultra-low interest rates.
Gold rose another 1.6% to a record high of $ 1,943 per ounce , surpassing its gains in September 2011.
Silver climbed another 5.5% to take its July streak past 30%, which would be its best month on record.
10am update: Erratic morning for FTSE
FTSE continues to suffer an erratic morning, remaining down on the day.
After plummeting to 6,093 soon after open, it rose quickly to 6,118 shortly after 9am.
However it has since dropped once again to 6,098.
9.20am update: Bleak open for EU markets
It’s been a tough open for European markets, with Euronext 100, CAC 40 and Swiss Market Index.
Euronext is down 0.59%, CAC is down 0.45% and Swiss Market is down 0.12%.
DAX is slightly up on 0.05%.
8.30am update: FTSE plummets on open
FTSE has dropped this morning, reflecting growing economic concern over a possible second coronavirus wave.
The index dropped from 6,123 to 6,095 in just half an hour this morning.
It follows a concerning pattern after FTSE fell throughout last week, after starting last Monday on 6,261.
5.52am update: Gold hits record high as US-China ties worsen
MSCI’s ex-Japan Asia-Pacific index rose 1.3 percent as Taiwan’s TSMC, Asia’s third-largest company by market capitalisation, rose almost 10 percent.
The chipmaker’s gains boosted other tech stocks in the region and came after rival Intel signalled it may give up manufacturing its own components due to delays in new 7 nanometer chip technology.
Also soothing sentiment, Chinese shares eked out gains after big falls late last week, with CSI300 index rising 0.5 percent.
S&P500 futures were last up 0.4 percent in choppy trade while Japan’s Nikkei fell 0.5 percent, resuming trade after a long weekend and catching up with falls in global shares late last week.