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Stocks - Europe Lower Amid Doubts Over Summit; Philips Gains

Published 07/20/2020, 04:00 AM
Updated 07/20/2020, 04:06 AM
© Reuters.

By Peter Nurse 

Investing.com - European stock markets weakened Monday, amid disappointment at signs that the region’s leaders are preparing to water down an agreement over the EU's groundbreaking proposed recovery fund, making it less effective than hoped.

At 4:05 AM ET (0805 GMT), the DAX in Germany traded 0.4% lower, the CAC 40 in France fell 0.6% and the U.K.'s FTSE index was down 0.8%. 

European Union leaders remain deadlocked after three days of haggling over a plan to revive economies hard hit by the Covid-19 pandemic, unable to agree on how to structure the 750 billion euros ($860 billion) proposed for the recovery fund and what conditions to put on the countries - mainly from the Mediterranean rim - that would benefit from the fund.

Five European Union governments--Austria, the Netherlands, Finland, Denmark and Sweden--have been holding up negotiations over the deal to reboot the bloc’s economy.

Still, Bloomberg reported these four governments are now satisfied with 390 billion euros of the fund being made available as grants, not the 500 billion originally envisaged, with the rest coming as low-interest loans. This could result in a deal being signed as soon as this afternoon.

In corporate news, Koninklijke Philips (AS:PHG) stock rose 3.7% after the Dutch medical-technology company offered up a positive update, expecting to return to sales growth in the second half of the year.

Intesa Sanpaolo (MI:ISP) stock was flat after the Italian bank increased its takeover offer for smaller rival Unione di Banche Italiane (MI:UBI), adding a cash component to what had initially been an all-share offer. UBI Banca stock rose 12%.

Julius Baer (SIX:BAER) stock fell 3.3% despite posting a sharp rise in net profit in the first six months of the year, as assets under management declined despite net inflows during the period.

U.K.-based small-cap Synairgen (LON:SYNG) stock tripled after preliminary results suggested its new treatment for Covid-19 dramatically reduced the number of patients needing intensive care. An update on the Oxford University experimental drug being developed in partnership with AstraZeneca (LON:AZN) is due later Monday.

Oil prices fell Monday as the growth of coronavirus cases around the globe continued to drag on the recovery in fuel demand. While fuel demand has recovered from the record drop in April after countries around the world imposed strict lockdowns, usage is still below pre-pandemic levels. 

Additionally, last week the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed to scale back oil production cuts from August.

At 4:05 AM ET, U.S. crude futures traded 1% lower at $40.34 a barrel, while the international benchmark Brent contract fell 1% to $42.72.

Elsewhere, gold futures were flat at $1,810/oz, while EUR/USD traded at 1.1448, up 0.2% on the day.



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