European stocks slip and pound tumbles with Brexit trade deal up in the air

by Warrior2

European stocks slipped on Monday, after weekend talks didn’t lead to a trade deal between the U.K. and the European Union.

After rising for five consecutive weeks, the Stoxx Europe 600 SXXP, -0.24% started Monday on the back foot, slipping 0.4%, with banks including Lloyds Banking Group LLOY, -2.15% declining.

The German DAX DAX, -0.24% and French CAC 40 PX1, -0.68% nursed small losses, while the U.K. FTSE 100 UKX, 0.67% edged higher as the pound GBPUSD, -1.21% tumbled. U.K. exporters, including drugmaker AstraZeneca AZN, 2.78%, tend to benefit when the pound slides, and AstraZeneca separately received an upgrade from Morgan Stanley.

Futures on the Dow Jones Industrial Average YM00, -0.35% fell 108 points.

Over the weekend, U.K. Prime Minister Boris Johnson held talks with European Commission President Ursula von der Leyen, as negotiators try to reach a deal on a level playing field, dispute mechanisms, and fishing, with the latter topic mostly resolved, according to reports.

Irish Foreign Minister Simon Coveney told Irish broadcaster RTE that the update on Monday from the EU’s chief negotiator, Michel Barnier, was “very downbeat,” while The Sun newspaper quoted a source close to Johnson as saying the U.K. could exit the talks altogether in “hours.”

Traders also were reacting to data showing a 21% jump in Chinese exports in November, including a 10% increase to the U.S. Separately, Reuters reported the U.S. was preparing economic sanctions on a dozen more Chinese officials, in response to Beijing’s crackdown on dissent in Hong Kong.

The European Central Bank on Thursday is expected to extend the capabilities of its bond-buying program. In the U.S., a bipartisan group of senators is expected to unveil the legislation behind its $908 billion stimulus plan as early as Monday.

Of stocks in the spotlight, IMImobile IMO, +47.33% jumped 47% as networking hardware company Cisco Systems CSCO, +0.61% said it would buy the U.K. cloud-communications services firm for £543 million, a 48% premium to Friday’s close.

What the News Means for You and Your Money

Get the tools you need to succeed in the market, with real-time market data, news, and analysis from MarketWatch — one of the most reputable brands for personal finance, business, and market news. Become a MarketWatch subscriber today.

Countrywide CWD, +22.51% jumped 23% to 314 pence as Connells, a real-estate agent, upped its offer for its rival by 30% to 325 pence per share. Private-equity firm Alchemy Partners has offered to inject £70 million and take controlling a stake in Countrywide. Alchemy on Monday said it was “considering its options.”

Retail company Frasers Group FRAS, -1.06% slipped 0.5%, after saying that it is in negotiations with the administrators of department store Debenhams’ U.K. business regarding a potential rescue.

You may also like

Leave a Comment