European stocks higher; Julius Baer soars 6%

Bourses in Europe were lower in early trade on Monday as auto stocks slumped amid allegations of collusion.

The pan-European Stoxx 600 was 0.18 percent down with most sectors trading in negative ground.

The Auto sector was under pressure after reports that the European Commission is investigating collusion between German carmakers. Volkswagen fell nearly 3 percent, Daimler was 2.5 percent down and Peugeot dropped 2.3 percent. The European Commission said it received information on alleged collusion but it is still assessing the information. The probe could damage the sector’s reputation further following the diesel emissions scandal.

Travel and leisure stocks were also struggling in early trade after Ryanair reported second quarter earnings. Investors are worried about increased market competition in the winter months. The Irish airline warned it could cut its late summer fares by as much as 9 percent compared to last year. The stock dropped 4.4 percent in early trade.

Banking and retail stocks were slightly higher in early trade as investors expect further monetary policy tightening in the U.S. later this week and digest possible merger news. B&M European rose 4.5 percent on reports that Walmart’s U.K. unit Asda is considering a £4.4 billion takeover bid.

Julius Baer soars 6%, Gemalto down 16%

Reckitt Benckiser announced that its full year target growth was a “challenging” one as the firm is still struggling to return to normal after a cyber attack. The episode led to a 2 percent fall in sales during the second-quarter of this year. The stock fell 2 percent in early trade.

Julius Baer said Monday its assets under management grew 6 percent to $375.18 billion in the first half of 2017, roughly in line with analysts’ forecasts. The Swiss bank led the gains across the European benchmark, up by nearly 6 percent.

The digital security firm Gemalto fell 16 percent after several rating downgrades. The firm issued its fourth profit warning since October last week.

Data and currencies

President Donald Trump said Sunday he is willing to sign new sanctions against Russia. However, in Europe, the European Commission’s President Jean-Claude Juncker warned that there will be retaliations on the U.S. if it pushes sanctions affecting European companies.

Meanwhile, in terms of data, there will be new flash manufacturing PMIs in Germany and the euro zone. In France, the figures showed a slowdown in economic activity. IHS Markit’s purchasing managers’ survey dropped slightly to 55.7 from 56.6.

In currency markets, the euro held at two-year highs following remarks by ECB President Mario Draghi last week, while the dollar remained weak ahead of the U.S. Federal Reserve’s policy meeting later in the week.

Source: CNBC