Europe Markets: Banks lead European stocks lower as Italy jitters resurface

European stocks dropped for a third straight day on Tuesday, as renewed concerns over Italy’s lenders dragged bank shares lower across the continent.

The Stoxx Europe 600 index SXXP, +0.02% fell 0.2% to 363.08, building on a 0.5% loss from Monday.

Banks continued to weigh on the pan-European benchmark, with the Stoxx Europe 600 Banks index FX7, -0.41% down 0.7%. The loss came after Italian lenders Popolare di Vicenza and Veneto Banca late Monday proposed a settlement deal with shareholders that could cost them more than €600 million ($636.03 million), according to Reuters. The deal would eat into their capital buffers, which could push them to ask for a state bailout.

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