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Europe close: Stocks dip with UK and Italian politics in focus

By Alexander Bueso

Date: Thursday 15 Nov 2018

Europe close: Stocks dip with UK and Italian politics in focus

(Sharecast News) - Stocks across the Continent finished near their worst levels of the session as investors digested the ongoing political convulsions in London, even as they kept a wary eye on the Italian government's antics with Brussels over its 2019 budget.
"Calls for a vote of no confidence in Theresa May only heightens the chance that we will leave the EU without a deal. If the Prime Minister falls, there's a chance that any new leader would be either a hardline Brexiteer, or Jeremy Corbyn," said IG's Josh Mahony.

"Put simply, businesses are looking for a deal that retains a close relationship with the EU, and with such little time left, today's plan seems to be the only option. With the likeliness of a Bank of England rate hike for the foreseeable future tumbling over the past 24 hours, it is clear that markets see a very uncertain future for the UK."

Overnight, Prime Minister Theresa May announced that the Cabinet had approved her proposals for a deal with the European Union, but come Thursday morning in Westminster, there was talk of an imminent leadership challenge and perhaps even the possibility that a second referendum might be held.

However, in parallel Bloomberg was reporting that officials in Beijing had outlined some of the concessions that China might be willing to make, which appeared to be propping up risk appetite globally.

By the end of trading, the benchmark Stoxx 600 was down by 1.06% or 3.84 points to 358.43, alongside a 0.90% or 172.11 point fall on the FTSE Mibtel to 18,905.36.

Germany's Dax also finished lower, losing 0.52% or 58.86 points to trade at 11,353.67, while the Spanish Ibex 35 was down by 0.36% to 9,073.50.

In parallel, the pound slid 1.98% versus the euro to 1.1263.

Meanwhile, in Italy, deputy Prime Minister, Luigi di Maio, criticised Austria and Holland's announcement that they would back the European Commission if it chose to start an infringement procedure against Rome over its budget for next year.

"We are going to keep going because the alternative is to massacre pensioners even more, massacre the unemployed even more, massacre companies even more. This can't be the alternative," Di Maio said, according to Ansa.

Commenting on the outline of the deal agreed with the British government, early on Thursday, European Council President, Donald Tusk said that it would limit the damage to both parts caused by Brexit and had secured the vital interest and principles of the 27 member states and the European Union as a whole.

Tusk also called a European Council meeting for Sunday, 25 November, to ratify the agreement, adding that his intention was to make Britain's withdrawal as little painful as possible.

According to one of the persons cited by Bloomberg, talks between the world's two biggest economies were ongoing and constructive: but another two said those concessions fell short of what the US administration was seeking, meaning that a deal between the leaders of the two countries on the sidelines of the G-20 meeting at the end of the month was unlikely.

Economic data published thus far on Thursday was underwhelming at best, with the latest available figures revealing a sharp reduction in the Eurozone's trade surplus.

Eurostat said the euro area's seasonally-adjusted trade surplus shrank from €16.8bn in August to €13.4bn for September.



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