European bourses end lower on political woes; Fed meeting in focus

Stock markets in Europe provisionally ended lower on Monday as investors remained cautious in the wake of the U.K. election and awaited a meeting of the Federal Reserve later this week.

The pan-European Stoxx 600 hit a seven-week low and was 0.94 percent lower at close of play Monday, with most sectors and major bourses moving south. Technology stocks were by far the worst performing sector, down by more than 3.6 percent. The Nasdaq composite hit a record high at the open on Friday before closing 1.8 percent lower. Shares of Apple, Facebook, Amazon, Netflix and Google-parent Alphabet all fell more than 3 percent. These losses continued into Monday with major stock exchanges in the red in early deals.

Semiconductor business STMicroelectronics emerged the biggest loser in Europe, down more than 9 percent at the bottom of the benchmark. Austria Microsys ended the day down 8.3 percent while Dialog Semiconductor was 6.7 percent lower.

Banking stocks also moved lower on Monday despite an upcoming Federal Reserve meeting and expectations that the central bank will raise interest rates. Investors are slightly cautious due to a recent dip in economic data and uncertainty regarding President Trump’s policies.

Oil and gas stocks, on the other hand, rose slightly after deep losses last week as investors wait for additional data on global stocks and as the dollar softens. Brent prices were up by about 1.16 percent, trading at $48.71 and the WTI was up by 1.3 percent at $46.44.

International oil and gas company Petrofac led the gains and was at the top of the European benchmark late Monday, up 7.9 percent. Saipem and Tullow Oil came in just beneath, up 5.2 percent and 4.1 percent respectively.

In the corporate world, Unicredit’s CEO Jean Pierre Mustier said he is confident domestic banks will help the two ailing Veneto-based banks. Shares of Italian banks were higher on Monday with Ubi Banca up by 3.45 percent on Monday afternoon. The latter started a capital increase, which is due to end June 27. More broadly, however, banks in Europe were down by more than a percent.

U.K. housebuilders moved higher on Monday recovering some of the losses made on Friday after the hung parliament in the general election.

In France, Orange Chairman Stephane Richard said the French telecom market is unlikely to see a merger among the four mobile operators in the near future.

The new British cabinet is set to have its first meeting this Monday after Prime Minister Theresa May was re-elected with a minority government. With a weakened hand she reappointed most of her ministers on Sunday. Media reports indicate that the new government could adopt a soft Brexit to keep the U.K. in the single market despite previous statements and aims of the Conservative leader.

Meanwhile in Italy, the populist Five Star Movement seems to have suffered a severe setback in local elections on Sunday, whereas in France, the party of the independent President Emmanuel Macron is set to get a huge majority in parliamentary elections trouncing traditional parties.

In the Middle East, Qatar said it is ready to listen to the concerns of other Arab states after they cut diplomatic and economic ties.

Source: CNBC