European Equities Shed Earlier Gains By Close Amid Inconclusive Spanish Election
European equities closed lower on Monday, giving up earlier gains, as Spain's benchmark index plummeted after a general election brought an inconclusive result, breathing renewed uncertainty into the country's prospects for political stability and economic growth over the coming year.
Spain's incumbent Partido Popular (Popular Party) led by Prime Minister Mariano Rajoy secured the largest quantity of votes but lost its outright majority raising the prospect of a coalition government that could slow down political decision-making and put the brakes on the pace of economic growth seen in the past few years.
Meanwhile, British metal mining stocks experienced a rally and the index of producer prices for industrial products fell by 2.5% in Germany in November 2015 compared with the corresponding month of the preceding year.
Energy prices decreased by 7.1% in November 2015 compared with November 2014, prices of non-durable consumer goods edged down by 0.1% and prices of intermediate goods pulled back by 2.2%, according to data published by Destatis on Monday. By contrast, prices of capital goods rose by 0.7% and prices of durable consumer goods by 1.5%.
In the US, the Chicago Fed National Activity Index - a barometer of overall economic activity and inflationary pressure - dropped to -0.30 in November from -0.17 in October. This marks the fourth consecutive month when the index has been below zero. Negative readings reflect below-trend growth.
Further US economic data, including Q3 GDP, home sales and the University of Michigan's consumer sentiment indicator are expected to be published over the coming days.
In equities, Coca-Cola HBC AG fell 2.7%, Associated British Foods declined 2.7% and Smith & Nephew plc fell 2.5%. Commodities stocks dominated the gainers in London's FTSE 100 Index with Glencore and Antofagasta, up 2.7% and 2.1%, respectively. Television company ITV was 2.9% higher and hotel operator InterContinental Hotels Group was 2.0% higher.
On the DAX, engineering firm Linde fell 2.5%, Fresenius Medical Care shed 2.5%, exchange operator Deutsche Boerse was down 2.5% and chemical company BASF shed 1.8%.
And, on the CAC-40, oil company Total slipped 1.6%, Air Liquide was down 2.9%, aircraft maker Airbus shed 2.1% and telecommunications company Orange fell 2.1%.
The FTSE 100 closed 0.29% lower, the DAX fell 1.04% and the CAC-40 shed 1.30%. Spain's IBEX 35 closed 3.62% lower.
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