Devaluation scare stories haunted a number of big Spanish stocks, as traders and investors took a cynical view of the weekend package of economic measures from Argentina.
Telefonica, which has expanded into the region via acquisitions in recent years, tumbled 7.9 per cent to €15.25. Banks were also crunched. Banco Santander Central and Banco Bilbao Viscaya have big investments, possibly up to 8 per cent of total assets.
The Argentine package contains a currency adjustment for exporters. The worry in the foreign exchange markets was that this initial move to ease the squeeze caused by the peso's peg to the dollar could rapidly turn into a full-scale devaluation.
At the end of an active session, BSCH was 4.2 per cent lower at €10.61 and BBVA 3 per cent at €15.42.
Total Fina came in for steady selling as crude oil prices in Europe eased below $28 a barrel and a certain amount of hesitation hit sentiment ahead of a big exploration and production presentation by the group in London on Thursday.
The shares, which have had a solid run since the first quarter results were announced, came off 4 per cent at €167.30.
Financial stocks softened amid mounting inflation and interest rate uncertainty as traders digested the latest rise for the eurozone consumer price index and peered ahead to the next monetary policy meeting at the European Central Bank.
ECB dilemma The need to rein back inflation without further damaging a slowing eurozone economy has created a dilemma for the ECB.
