European Markets Close Lower On Brexit Woes, Trade Issues

(RTTNews) - European markets ended weak on Tuesday, snapping a four-session winning run, weighed down by Brexit showdown and a lack of clarity with regard to resumption of U.S.-China trade talks after a new round of tariff hikes took effect over the weekend.

Amid political uncertainty in the U.K., the pound sterling tumbled to $1.1960 earlier in the day, but recovered to move past $1.2100 later on in the session.

The pan European Stoxx 600 ended down 0.23%. The major markets in Europe ended weak. France's CAC 40 shed 0.49%, Germany's DAX declined 0.36% and the U.K.'s FTSE 100 ended down 0.19%, while Switzerland's SMI closed lower by 0.72%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Italy, Norway, Poland and Portugal ended lower.

Netherlands, Iceland, Russia, Spain, Sweden and Ukraine ended flat, with a slightly negative bias, while Denmark and Turkey closed higher.

In Germany, Thyssenkrupp shares declined nearly 4%. Deutsche Post, HeidelbergCement, Continental, Lufthansa and BASF also ended notably lower. Automobile stock Daimler gained about 1%.

In the French market, Louis Vuitton, Unibail Rodamco, Kering, Air Liquide, Safran, ArcelorMittal and STMicroElectronics lost 1.4 to 2%.

On the other hand, Sanofi, Renault, L'Oreal and Michelin ended with sharp to moderate gains.

In London, DS Smith, Easy Jet, Informa, Just Eat, Antofagasta, Persimmon, IAG, Prudential, Lloyds Banking and AstraZeneca lost 1.4 to 3.4%, while Fresnillo, Micro Focus, Ferguson, Associated British Foods, Coca Cola, NMC Health, Unilever and Ocado moved higher.

The U.K. Prime Minister Boris Johnson today lost his majority in Parliament as conservative lawmaker Phillip Lee defected to the pro-European Liberal Democrat party. Lee said Johnson was ignoring expert advice on Brexit.

In economic news from Europe, Eurozone producer price inflation eased to the lowest since late 2016 in July largely reflecting weak energy prices, data from Eurostat showed Tuesday.

Producer prices grew 0.2% annually in July, as expected, following a 0.7% rise in June. This was the lowest inflation since November 2016, when the rate was 0.1%.

Energy prices declined 1.7% on year after easing 0.2% a month ago. Producer price inflation excluding energy came in at 0.6% versus 0.8% in June.

Month-on-month, producer prices rose 0.2% in July, in contrast to a 0.6% fall in June. This was the first increase in five months.

Data from IHS Markit's purchasing managers' survey showed UK construction sector contracted for the fourth consecutive month in August as new work declined the most in over ten years, leading business optimism to plummet to over a decade-low.

The IHS Markit/CIPS UK Construction Total Activity Index fell to 45 from 45.3 in July. Economists had forecast a modest improvement in the reading to 45.9.

On the trade front, U.S. President Donald Trump indicated U.S. and Chinese officials still plan to meet for trade talks this month but argued the U.S. "can't allow China to rip us off anymore as a country."

In a series of tweets this morning, Trump threatened to get tougher on China if he wins re-election and dismissed suggestions that he work with the European Union to go after Chinese trade practices.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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