European shares ended down 1.3% on Friday, reversing the previous session’s tentative recovery.
Banks fell after Goldman Sachs analysts cut the rating on Spain’s Santander to “neutral” from “buy” and lowered price targets for Deutsche Bank, Commerzbank and Deutsche Postbank.
UBS shed 2.6% despite saying a tax credit should help it avoid a big second-quarter loss. Bradford & Bingley’s shares slumped 18% after private equity firm TPG pulled out of a deal to inject cash into the UK mortgage lender.
Crude prices declined, but were still high enough to drive up oil stocks and pull down airlines. US markets were closed for the Independence Day holiday.