European stocks close lower; oil prices hit 18 month highs

European stocks closed lower Monday amid continued political uncertainty in Italy while investors await another rate decision from the U.S. Federal Reserve.

The pan-European Stoxx 600 ended 0.46 percent lower with major bourses trading in negative territory. Travel and leisure stocks were one of the worst performers on Monday, closing down over 1.3 percent. Air France dropped plans to spin off its maintenance arm – one of its more profitable business divisions.

Healthcare stocks ended lower by more than 0.9 percent with Swiss firm Lonza leading the losses. The company announced it was in talks to buy U.S. drugs maker Capsugel.

Media stocks were also down on reports that a major shareholder of Sky will oppose a bid from Twenty-First Century Fox for the company. The media company owned by Rupert Murdoch had reportedly reached an agreement in principle to buy Sky for £11.2 billion ($14.12 billion). Sky shares were down 2.8 percent at the close.

Meanwhile in the U.S., the Dow Jones industrial average continued up slightly and set a new record high as a remarkable post-election rally continued.

The Italian Foreign Minister Paolo Gentiloni is set to become the new prime minister after the resignation of Matteo Renzi. President Sergio Mattarella is reportedly expected to meet Gentiloni as the European markets close.

Meanwhile, the embattled lender Monte dei Paschi has said it will press ahead with a 5 billion euro ($5.4 billion) recapitalization plan before the end of the year, after the European Central Bank refused its request for more time to stabilize its capital ratios. Its shares ended up by 3.69 percent.

Oil prices soared by as much as 6.5 percent on Monday after hitting an 18 month high following OPEC and non-OPEC nations agreeing to curb oil production in Vienna, Austria on Saturday for the first time in 15 years.

Eleven oil producing countries, that are not members of OPEC, said on Saturday they are to cut production by 558,000 barrels per day (b/d), just short of the 600,000 targeted by OPEC in November.

Elsewhere, Phillip Hammond, the U.K.’s finance minister, said that it may take time during the Brexit transition to see the benefits of U.K. commitment to free trade, according to a Reuters report.

Hammond began addressing the Treasury Committee at 4:15 p.m. London time.

Source: CNBC