European markets closed firmly in the red ahead of the first presidential debate. Democratic candidate Hillary Clinton and Republican candidate Donald Trump face off for the first time tonight.

Banks came back to the fore again today as Deutsche Bank (DB) fell on capital raising concerns pulling down lenders across the continent.

Deutsche Bank closed 7.54% down at €10.54, their lowest level since listing on the Xetra exchange in 1992. The fall came after German magazine Focus reported that Chancellor Angela Merkel had ruled out providing state aid to help with the bank's looming legal fees. 

Just over a week ago the Department of Justice proposed Deutsche Bank pay $14 billion to settle mortgage-backed securities misselling in the runup to the financial crisis. The bank has said it has no intention of paying that amount. In a statement released this afternoon Deutsche Bank head of communications Jorg Eigendorf said, "At no point John Cryan has asked Chancellor Merkel to intervene in the RMBS issue with the US Department of Justice."

Eigendorf said state aid was no the agenda. "Deutsche Bank is determined to meet the challenges on its own," he said.

Meanwhile, a spokesperson for the German government said there was no grounds for speculation over state funding for the bank.

In London, the FTSE 100 was down 1.32% at 6,818.04.

In Frankfurt the Dax closed 2.26% down at 10,386.76 and the Cac 40 lost 1.83% to close at 4,406.59.

Monday's selloff is the worst for European stocks in weeks.

Lenders were dragging down benchmark indices across the continent. The EuroStoxx bank index the SX7E was recently down 2.70% at 91.39.

Lloyds Banking Group (LYG) shares closed 3.67% down after Goldman Sachs cut its investment stance and target price on the London-based lender, noting that it faces challenges from low interest rates as well intensifying competition.

Barclays (BCS) lost 2.35%. Commerzbank (CRZBY)  closed 1.88% down. In Paris, Societe Generale (SCGLY)  lost 2.95% and BNP Paribas (BNPQY)  closed 3.27% down.

In Italy, UniCredit  (UNCFF)  closed 3.63% down. Bucking the trend, Monte dei Paschi  (BMDPF) was up 1.43%.

German chemical company Lanxess gained 8.14% throughout the day after it announced a $2.7 billion bid to buy Chemtura (CHMT) . The German company offered $33.50 per share for the Philadelphia-based plastic additives maker. The offer represents an 18.9% premium over Chemtura's Friday closing price of $28.18.

Lanxess CEO Matthias Zachert said in a statement, "With this acquisition, we are forming a major global player in the field of additives and are significantly strengthening our already profitable portfolio."

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