Banks bore the brunt of the sell-off, with Lloyds Banking Group, Royal Bank of Scotland and Barclays among the sharpest fallers

Banks bore the brunt of the sell-off, with Lloyds Banking Group, Royal Bank of Scotland and Barclays among the sharpest fallers as strategists at Goldman Sachs cut their stance on the banking sector to “neutral” from “overweight”.
Although the banks rallied strongly last week after European leaders struck an agreement to prop up debt-laden Greece, Goldman pointed out that disquiet about the deal remained.
“After the initial optimism (the package included some very important elements that were above market expectations), doubts have started to creep back into the market,” said the broker. “In particular these revolve around the scope for funding the new initiatives, particularly in relation to the upsized role of the European Financial Stability Facility.”
Goldman pointed to other factors that could weigh on the banks, such as weak domestic demand throughout the periphery of Europe. “Concerns about capital raisings are also likely to remain high for some time, despite the relatively benign outcome of the stress tests,” it added.