European stocks mixed as Japan quake weighs; DAX falls 0.57%

Forex Pros – European stock markets were mixed on Monday, as shares in utility providers and insurers performed poorly following Friday’s massive earthquake in Japan, while U.S. futures indexes pointed to a lower open on Wall Street.

During European morning trade, the EURO STOXX 50 added 0.16%, France’s CAC 40 dipped 0.13%, while Germany's DAX slumped 0.57%.

Earlier in the day, Japan’s Ministry of Economy, Trade & Industry said that a hydrogen explosion had occurred at the Fukushima nuclear power plant north of Tokyo, two days after an explosion hit reactor one.

Shares in the world’s largest maker of nuclear reactors Areva plunged 8.1% amid concerns damage to Japanese nuclear power plants would hurt demand for reactor fuel.

Utility providers linked to nuclear energy also suffered after officials in China, India and the U.S. called for a review of atomic energy plans. Germany’s largest renewable energy provider RWE AG saw shares tumble 3.4%, while rival E.ON dropped 3.3%.

Meanwhile, shares in insurance providers performed poorly after a preliminary estimate by disaster modeler AIR Worldwide said the industry could face claims of as much as USD34 billion in the wake of Friday’s devastating earthquake and tsunami.

Swiss Reinsurance saw shares drop 4.4%, shares in Germany’s largest reinsurer Munich Re fell 2.2%, while rival Hannover Re tumbled 5.3%.

However, shares in the financial sector posted sharp gains after JP Morgan upgraded its view of the European banking sector to ‘overweight’, citing several factors, including the agreement by euro zone heads of state to strengthen the EUR440 billion rescue fund and lower the interest rate on Greece's bail out.

Spain’s largest lender Banco Santander surged 5%, Italy’s biggest bank Unicredit saw shares jump 3.95%, while Societe Generale rallied 3.6%.

In London, the FTSE 100 added 0.14% as shares in raw material companies were boosted amid speculation demand for metals would increase once rebuilding efforts to damaged areas in Japan got underway.

Shares in copper producer Xstrata jumped 1.95%, Rio Tinto added 1.15%, while Vedanta Resources saw shares climb 1.85%.

The outlook for U.S. equity markets, meanwhile, was downbeat. The Dow Jones Industrial Average futures pointed to a drop of 0.36%, S&P 500 futures indicated a loss 0.49%, while the Nasdaq 100 futures slumped 0.68%.

Earlier in the day, official data showed that industrial production in the euro zone rose less-than-expected in January.

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