European stocks slip into red as political turmoil shakes up sentiment
European stocks came under pressure around the start of Thursday’s trading session, as investors monitored political news going on around the world.
The pan-European STOXX 600 was posting solid losses, off 0.44 percent, with almost all of the region’s sectors dipping into negative territory. A sea of red was seen across European bourses.
Trading in Europe appears to be following the downtrend moves seen in markets overseas. Stocks on Wall Street overnight closed lower, after new policy announcements were made by the U.S. central bank. On Wednesday, the Federal Open Market Committee (FOMC) hiked its benchmark interest rate by a quarter point; and went onto add that one more hike was projected in 2018 — and three more were penciled in for 2019.
Markets came under pressure, when Chair Jerome Powell told reporters that he didn’t see inflation surprising to the upside — a comment which triggered bond yields to drop. Asian stocks were mostly lower Thursday, following the negative U.S. trading.
Looking at Europe’s corporate space, H&M posted its latest earnings update, which saw pretax profit for the third quarter miss expectations. Shares of the Swedish retailer however soared over 10 percent, after it reassured investors that it wouldn’t need to cut costs further in order to shift unsold clothing; Reuters reported.
Shares of TUI rose over 1 percent after the tourism group reiterated its guidance for the year, shaking off concerns surrounding the hot summer and how it impacted the firm’s ability to perform.
On the other end, IG Group was one of the STOXX 600’s biggest losers, sinking almost 9 percent after the British firm announced that its chief executive, Peter Hetherington, would be stepping down from his role with immediate effect.
Meantime, pharmaceuticals firm Indivior fell over 8 percent after slashing its revenue outlook for Sublocade, an opioid addiction drug. In the release published Wednesday afternoon, Indivior said it had “substantially underestimated” the time it took for the drug’s approval of medical benefit coverage to arrive to individual patients.
Stepping aside from the corporate space, tensions between the U.S. and major economies continue to be in focus for global traders. In the latest surrounding the tit-for-tat trade war with China, President Donald Trump accused China of intending to interfere with the upcoming U.S. congressional elections this November. He stated that the Asian nation didn’t want the Republican Party to perform well, due to his recent war-of-words with China on trade.
Trump however did not provide any evidence towards this allegation; and this claim prompted an immediate rejection from Beijing, who said that they didn’t intrude on any country’s domestic matters; Reuters reported.
Sticking with trade, Trump also took aim at Canada, criticizing the U.S. neighbour for its slow pace of discussions concerning the overhaul of NAFTA. The U.S. president went onto threaten Canada with levies, and stated that he had recently vetoed Prime Minister Justin Trudeau’s invitation for a one-on-one meeting — a claim that prompted a spokesman of Trudeau’s government to state that no such meeting had been requested.
Looking closer to home, investors are tracking news coming out of Italy, as concerns surrounding the country’s deficit next year and infighting in the government.
Media reports have suggested that the populist parties in charge in Italy, are pressing the finance minister to resign, if he doesn’t deliver the pledges they made in the campaign. A spokesperson for the finance minister told CNBC the rumours are fake news and Giovanni Tria is focused on the budget numbers.
In Brexit news, Chancellor of the Exchequer Philip Hammond tweeted on Wednesday that the autumn budget statement would be presented earlier than usual, on October 29, ahead of a vital Brexit summit scheduled in November.
Source: CNBC
