European stock indexes have closed lower, adding to recent losses amid heightened market volatility around the globe. Markets have become jittery as investors worry about a litany of issues, from China's economic slowdown to the plunge in oil prices, banks' finances and potential recessions in emerging markets. Greece's stock market has fallen to its lowest level since 1989 while the country's borrowing rates in the bond markets have spiked up to levels last seen during the more acute phases of its crisis. With the government struggling to agree on a pensions reform package with creditors and the unions angry at the latest batch of austerity measures, there are renewed fears over the bailed-out country's economic outlook. The selling pressure across Europe's stock markets has intensified, with worries over the health of the region's banks at the forefront of investor concerns. Michael Hewson, chief market analyst at CMC Markets, says the "solvency of Italy's banks has also been a continuous source of concern" and that the skepticism is "well-founded." According to the International Energy Agency, oil prices will continue to come under pressure as supply is set to outpace demand this year. The organization, which advises countries on energy policy, said in its monthly report that global excess supply may reach 2 million barrels per day during the first quarter, and a further 1.5 million barrels a day in the second quarter. A lower yen makes Japanese exports more competitive in international markets as well as raising the cost of imported goods. Though stock markets around the world may be experiencing one of their most prolonged downturns since the global financial crisis of 2008, other financial assets are enjoying strong gains. Banks have been at the forefront of the selling pressure in Europe in recent days as investors worry about their ability to deal with a worse-than-anticipated global economic outlook. [...] Italy's UniCredit was down again as fears over the scale of bad loans in the country's banking sector remain. Neil Mackinnon, global macro strategist at VTB Capital, said the trading week has started with a firm "risk-off" mood, with European banks in the spotlight given high levels of non-performing loans, especially among the Italian banks. Stock markets in Europe have managed to eke out some gains despite an earlier slide in Japan's main index, the latest in a series of dramatic moves in global financial markets. Investors around the world are worrying about a number of issues, including the fall in the price of oil to multi-year lows, the scale of the slowdown in China and whether many parts of the global economy will fall back into recession and suffer a debilitating period of deflation, or falling prices.
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