European shares slump, alarmed by Cyprus plan
LONDON, March 18
LONDON, March 18 (Reuters) - European shares fell sharply on Monday, with markets rattled by a radical bailout plan for Cyprus which knocked confidence in the European banking system, though some investors saw the dips as a buying opportunity.
In a departure from previous EU practice that depositors' savings are sacrosanct, Cyprus and international lenders agreed at the weekend that savers in the island's outsized banking system would take a hit in return for the offer of 10 billion euros ($13.07 billion) in aid.
The FTSEurofirst 300 was down 1.2 percent at 1,188.31 by 0806 GMT, led down by a 2.4 percent drop in banking stocks.
"The whole Cyprus situation feels to me like a storm in a tea cup and weakness should be bought. This is a message from Europe to Cyprus to stop misbehaving," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million assets.