European stocks move lower on political uncertainty

Stock markets in Europe edged lower Wednesday morning as investors reacted to fresh corporate earnings and ongoing political uncertainty in the U.S.

The pan-European Stoxx 600 was trading down 0.26 percent in mid-morning deals with almost all sectors and major bourses in negative territory.

Autos were among the worst performing sectors on Wednesday. Fiat Chrysler ‘s stock fell the most after Reuters reported in the previous session that the European Union would begin legal action against Italy for not policing allegations of emission test cheating by the car maker. Its shares were down 1.4 percent.

Ubisoft Entertainment, the world’s third-biggest entertainment company, posted a jump in profits for the first three months of the year after write-downs were less severe than expected. However, weak guidance appeared to send the firm’s shares to the bottom of the European benchmark. Its shares were 5 percent lower in mid-morning deals.

Meanwhile, Tullow Oil rose to the top of the European benchmark, up by 4.2 percent, following news that it encountered 75 meters of net oil pay in two zones in Kenya, Reuters reported.

Also, Thyssenkrupp jumped 3.9 percent in mid-morning trade as the steel company’s works council chief opposed a possible merger deal with Tata Steel.

The Austrian lender Raiffeisen Bank International beat analyst expectations as it posted a jump in net profits for the first-quarter and reported improving economic conditions. Its shares moved up 2 percent.

Politics and Data

Investors appeared increasingly concerned after the latest in a string of crises for the embattled U.S. administration. This has raised further doubts as to Trump’s ability to implement an aggressive stimulus program that includes tax cuts and big government spending. The White House has since denied the claims Trump pressed Comey to drop an investigation into former national security advisor, Michael Flynn, over his ties to Russia.

This has sent the dollar to a six-month low and sparked interest for the yen, treasurys and gold.

Meanwhile, euro zone inflation was confirmed at 1.9 percent in April. In the U.K., data showed an increase of 2.1 percent in wages in the first quarter of the year, but real wage growth turned negative.

Elsewhere, U.K. based oil company BP is set to host its annual general meeting on Wednesday. Shareholders are due to vote on the firm’s remuneration report which covers the pay and bonuses of BP executives.

While in the U.S., Secretary of State Rex Tillerson is due to meet Algerian Foreign Minister Ramtane Lamamra and German Foreign Minister Sigmar Gabriel.

Source: CNBC

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