Europe open: German Dax pumeled by losses in Bayer and BMW
By Alexander Bueso
Date: Wednesday 20 Mar 2019
(Sharecast News) - Stocks on the Continent have started the morning weaker, weighed down by very weak corporate updates coming from both sides of the Atlantic, even as investors wait on the results of the US central bank's policy meeting later in the day.
Investors were also digesting the somewhat mixed reports out overnight around the ongoing US-China trade talks, even as they tried to anticipate how the current impasse in the British Parliament might finally be broken - or not.
"It was another positive day for Europe's markets yesterday as the German DAX, FTSE100 and EurStoxx50 all hit their highest levels this year, and best levels since October last year, as did US markets, though there was a slide into the close on concerns that trade talks between the US and China may well be running into trouble, on some key points," said CMC Markets UK's chief market analyst, Michael Hewson.
As of 0903 GMT, the benchmark Stoxx 600 was down by 0.28% to 383.24, alongside a drop of 0.86% to 11,687.51 for the German Dax as shares of Bayer crumbled after a court ruling in the US found that one of the herbicides it inherited as part of its Monsanto acquisition triggers cancer.
To take note of as well, some reports indicated that Dutch Prime Minister, Mark Rutte's, governing coalition risked losing its one-seat majority in the country's Senate after a provincial vote later on Wednesday.
Losses elsewhere on the Continent were more muted, with the Cac-40 in Paris drifting lower by 0.09% to 5,421.20 and Milan's FTSE Mibtel ceding 0.16% to 21,396.66.
The Belgian central bank is scheduled to publish its consumer confidence index for the month of March at 1400 GMT.
Later in the day, the US Federal Reserve is set to publish its decision on interest rates at 1900 GMT, followed by a press conference by its Chairman.
Analysts appeared to be divided on just how 'dovish' US central bankers would prove to be, although as far as could be gleaned from Fed funds futures, financial markets had begun to price-in a small probability of a rate cut by the end of 2019.
Back on the corporate front, Switzerland's UBS was down by 2% after the head of the investment bank characterised conditions over the first three months of the year as some of the hardest for many years.
Speaking in London, UBS chief Sergio Ermotti said that year-to-date revenues at its investment banking unit had declined by a third, amid a dearth of flotations and merger activity.
In other German news, BMW shares hit the skids after the company told shareholders to expect profits in 2019 to come in "well below" the prior year level and that it would launch a €12bn cost-savings drive in order to offset the hit from trade spats and investments in the electric car arena.
Further dampening sentiment on Wednesday morning, stock in US shipping giant FedEx was lower after warning of weakness overseas, particularly in Europe.
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