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European stocks trade lower with eyes on G7 talks over Syria

Published 04/10/2017, 05:17 AM
© Reuters.  European equities trade mostly lower with focus on geopolitical risk
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Investing.com – European stocks traded mostly lower on Monday in a session with no major economic reports while investors kept an eye on geopolitical risks and digested corporate news flow.

Nearing midday trade in Europe, the benchmark Euro Stoxx 50 fell 0.29%, France’s CAC 40 lost 0.46% but Germany’s DAX 30 traded down 0.11%.

On the geopolitical front, tensions over Syria mount as Russia and Iran say American air strikes crossed the line, while the U.S. ambassador to the UN says removing Bashar al-Assad is a top priority for the White House.

As developments over Syria evolve, G7 foreign ministers are gathering in Lucca and the Italian host Angelino Alfano suggested that the U.S. airstrikes offered a window of opportunity to search for a political solution to the country’s civil war.

In European political news, the official campaign for the French presidency kicked off on Monday with the first round of voting set for April 23.

Expectations were for centrist Emmanuel Macron to beat far right, anti-euro candidate Marine Le Pen in the second round of voting to be held on May 7.

On a light day for economic data, the Sentix investor confidence rose to 23.9 in April from 20.7, beating expectations for a smaller increase to 21.0.

Monetary policy will be in focus Monday as European Central Bank (ECB) vice president Vitor Constancio presents the ECB’s annual report to the ECON Committee in Brussels, while U.S. Federal Reserve chair Janet Yellen may present her outlook on the American economy and the future path of policy tightening later in the session.

In company news, Barclays (LON:BARC) was catching headlines as the British bank announced that its chief executive Jes Staley is being investigated by U.K. regulators for his conduct in attempting to identify a whistleblower from the bank in 2016.

In big movers, Stada (DE:STAGn) led the Stoxx 600 higher with gains of 11% as the German drugmaker backed a takeover offer from Bain Capital and Cinven that value the firm at €5.3 billion ($5.6 billion).

Also in M&A rumors, shares in Shaftesbury (LON:SHB) jumped more than 4% on rumors of a full blown takeover after Hong Kong billionaire Samuel Tak Lee picked up £500 million ($620 million) in shares of the British property firm.

BHP Billiton (LON:BLT) also soared 5% activist hedge fund Elliott Management urged the world’s largest mining company to spin off $22 billion in U.S. oil assets and improve capital returns with a unification of its corporate structure.

Meanwhile, oil prices rose on Monday, supported by strong demand and uncertainty over the conflict in Syria, although another run-up in U.S. drilling activity kept a lid on gains.

Late Friday, data from oil services provider Baker Hughes showed that the number of active rigs drilling for oil in the U.S. rose by 10 to 672. That was the 12th straight weekly increase to the highest number since August 2015.

Energy stocks were mostly lower, as French oil and gas major Total SA (PA:TOTF) fell 0.68% and Italy’s ENI (MI:ENI) lost 0.39%, although Norwegian rival Statoil (OL:STL) advanced 0.13%.

Financial stocks traded with mixed signs, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) lost 0.74% and 1.58%, respectively, while Germany’s Commerzbank (DE:CBKG) and rival Deutsche Bank (DE:DBKGn) rival gained 0.70% and 0.42%, respectively.

Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) fell 0.47% while Unicredit (MI:CRDI) remained unchanged, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) traded down 0.31% and 0.48%, respectively.

In London, the commodity-heavy FTSE 100 slipped 0.02%.

Shares in Glencore (LON:GLEN) gained 1.22%, Anglo American (LON:AAL) advanced 1.50%, while BHP Billiton (LON:BLT) jumped 5.13% and Rio Tinto (LON:RIO) traded up 1.77%.

Energy stocks recorded losses, as BP (LON:BP) dropped 0.58% and rival Royal Dutch Shell (LON:RDSa) fell 0.42%.

Financial stocks showed mixed trade, with shares in HSBC Holdings (LON:HSBA) up 0.72% while the Royal Bank of Scotland (LON:RBS) lost 0.21%. Lloyds Banking (LON:LLOY) and Barclays (LON:BARC) rose 0.46% and 0.32%, respectively.

In the U.S., futures pointed to a flat open. The Dow Jones Industrial Average futures inched up 0.06%, S&P 500 futures edged forward 0.06%, while the Nasdaq 100 futures advanced 0.05%.

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