European stocks lower on concerns over Trump’s protectionism

Stock markets in Europe were lower early Monday after U.S. President Donald Trump took office and promised to pursue a protectionist policy.

The pan-European Stoxx 600 was off by 0.43 percent with most sectors trading red. Market players are adopting a cautious approach after President Donald Trump reiterated he will pursue a protectionist agenda.

Banking stocks were the worst performers, with the sector down by more than 1.3 percent. Credit Agricole fell more than 2.7 percent in early trade after a 491 million euro ($525 million) charge on its French retail unit last Friday. Several Italian banks were also off by more than 2 percent after media reports that Intesa Sanpaolo could take a stake in Generali. The latter on the other hand was up by more than 4.6 percent, topping the European index.

Oil and gas stocks were off by 1 percent as investors doubt that there will be a 100 percent compliance with an output cut deal stroke last year.

The euro and the sterling were higher on Monday against the dollar. The latter hit a five-week higher as investors believe that Tuesday’s supreme court ruling will say that the U.S. government will need parliamentary approval on its Brexit deal.

The earnings season has kicked off in Europe with Philips Lighting announcing that its operating profit margin rose to 9.1 percent. Its earnings before profit stood at 645 million euros ($693 million) compared to 547 million euros in 2015. Its shares were slightly down in early trade.

Essentra, a packaging components firm, said Monday its full-year adjusted operating profit would not be reached due to “challenging market conditions.” Its shared dropped more than 10 percent in early trade.

Reports of a potential merger between Berkeley Group and Bovis Homes sent their shares higher in early trade. The latter was up by more than 4.5 percent.

Also, on Monday’s calendar is also the release of the latest consumer confidence data in the euro zone.

Source: CNBC