Europe close: Stocks end on mixed note amid weakness in euro and pound
By Alexander Bueso
Date: Monday 26 Sep 2022
(Sharecast News) - European shares finished on a mixed note on Monday as markets continued to hammer Britain's pound in response to the UK government's mini-budget last week, while Italian shares rose after a right-wing coalition clinched victory at the elections held at the weekend.
"Between Russia threatening nuclear war, the pound trading like a emerging market currency in crisis, and Europe preparing for a rough winter, it is safe to say that any short-term bounce in stocks should be treated with a generous sprinkle of salt," said Josh Mahony, senior market analyst at IG.
The pan-European Stoxx 600 slipped 0.42% to end the day at 388.75, while Germany's Dax lost 0.46% to 12,227.92.
However, Italy's FTSE Mib index added 0.67% to 21,207.25 after the centre-right coalition led by Giorgia Meloni won a clear majority in both houses of parliament in Italy's general elections.
Oil, gas and mining stocks were all lower on the back of weaker crude and metal prices and a strengthening dollar.
The US dollar index traded up 0.77% to 114.07 while the yield on the benchmark 10-year Italian government bond jumped 20 basis points to 4.553%.
The British pound retreated by 1.57% to 1.0689.
In equity news, UK housebuilders all fell over fears of higher interest rates, with Travis Perkins, Vistry, Persimmon, and Taylor Wimpey in the red.
Virgin Money was also under pressure as Berenberg re-established coverage of the shares at 'hold' from 'under review', saying the bank will struggle to re-rate given potential revenue headwinds and a sector-lagging return on tangible equity.
Uniper shares were up 22% after the German government last week agreed to privatise the troubled energy provider.
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