Europe midday: Bounce in Oil & Gas offset by slide in Technology issues
By Alexander Bueso
Date: Monday 12 Nov 2018
(Sharecast News) - Stocks have begun the week lower, with early gains evaporating alongside another move lower in the single currency and talk of continued outflows from risk assets in Europe.
Dampening sentiment, shares in Italian lender Carige were suspended following reports of a possible funding shortfall.
In the background meanwhile, analysts at Bank of America-Merrill Lynch were pointing out to clients how risk assets in Europe saw further outflows last week, as investors sought "safety" by heading into money market funds.
"The lack of yield in Europe vs. the US, and the diverging economic macro cycles between the two regions is something to blame for this exodus from European risk assets," they explained.
Euroland politics was also very much in the news, with Italian Deputy Prime Minister, Matteo Salvini, saying at the weekend that his country could hamper
European Union activities in protest at being "jerked around" over Rome's handling of migrants, ANSA reported.
As of 1255 GMT, the benchmark Stoxx 600 was down by 0.47% or 1.85 points at 363.87, alongside a 1.07% or 122.96 point drop on the German Dax to 11,405.73, while France's Cac-40 was off by 0.34% or 17.46 points at 5,089.24.
Technology was the weakest segment of the market, with the corresponding Stoxx 600 gauge down by 2.44% at 417.90, while Oil & Gas was acting as an offset after Saudi signalled at the weekend that it might be prepared to curb crude shipments starting from December.
In parallel, euro/dollar was sliding 0.6% to trade at 1.12697 as the US dollar spot index notched up a fresh 52-week high.
According to European Commission president, Jean Claude Juncker, the bloc might only be safe from additional car tariffs imposed by Washington until the end of the year.
Commenting on the slide in the single currency, Bart Hordijk, Market Analyst at Monex Europe, blamed 'four apocalyptic horseman' for the weakness in the single currency: "Brexit, Italy, slower growth and a cautious European Central Bank are the four apocalyptic horsemen currently chasing the euro to its doom - well, at least to a 17-month low against the dollar."
Italian industrial production dipped by 0.2% month-on-month in September, ISTAT said, weighed down by a 1.9% fall in the output of durable consumer goods and a 1.6% drop in that of capital goods, but nevertheless beat forecasts for a decline of 1.0%.
In parallel, France's central bank reported that its industrial confidence index slipped from a reading of 104.0 for September to 103.0 in October, adding that its monthly activity indicator was pointing towards a quarterly rate of economic growth of 0.4% over the last three months of 2018.
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