EUROPE MARKETS: European Stocks Finish Slightly Lower As Traders Watch Italian Politics
14 Maggio 2018 - 06:28PM
Dow Jones News
By Sara Sjolin, MarketWatch
EDP rallies on takeover news
European stocks closed mostly lower Monday, with investors
tracking developments in Italian politics after two populist
parties said they had reached a deal to form a new government.
What are markets doing?
The Stoxx Europe 600 index slipped less than 0.1% to close at
392.19, edging back after scoring its longest weekly winning run
since March 2015 last week.
Italy's FTSE MIB index rose 0.3% to 24,221.47, as traders were
watching developments in Italian politics.
In Germany, the DAX 30 index ended down 0.2% at 12,977.71 on
Monday, while France's CAC 40 index closed marginally lower at
5,540.68. The U.K.'s FTSE 100 index fell 0.2% to 7,710.98
(http://www.marketwatch.com/story/uk-stocks-pull-back-after-longest-weekly-win-streak-in-12-years-2018-05-14).
The euro rose to $1.1975 from $1.1942 late Friday in New
York.
What is driving the market?
Italy was the major focus in Europe on Monday after
antiestablishment 5 Star Movement and hard-right League party over
the weekend reportedly reached a deal on forming a governing
coalition
(http://www.marketwatch.com/story/italys-populist-5-star-league-parties-reach-deal-on-government-program-2018-05-13).
The new government--expected to be announced in coming
days--would end more than two months of political deadlock in Italy
after the country's general election in early March produced an
inconclusive result. A coalition deal between the two populist
parties would also mark one of the biggest wins for European
antiestablishment parties.
Trade talks between the U.S. and China were also in the
limelight on Monday. Trump was seen as paving the way for
constructive discussions with Beijing this week after he over the
weekend offered a lifeline to struggling Chinese telecom giant ZTE
(http://www.marketwatch.com/story/trump-extends-lifeline-to-sanctioned-chinese-tech-company-zte-2018-05-13)(000063.SZ).
There were no major European data releases on deck on
Monday.
What are strategists saying?
"There is the clear positive to an end of over two months of
political gridlock [in Italy]; however, there is a glaring negative
in that such a coalition could impact on Italy's relationship with
the European Union, potentially throwing Italy's slowly recovering
economy into disarray," said Jasper Lawler, head of research at
London Capital Group, in a note.
"Anticipated measures include renegotiations of EU accords with
a tougher stance, although a full-blown withdrawal from the
European Union does not appear to be on the cards, which goes some
way to explaining the inexistent response from the euro," he
added.
Stock movers
IWG PLC (IWG.LN) surged 23% after the workspace company late
Friday said it has received an approach from Lone Star and two
separate indicative proposals from Starwood Capital and TDR Capital
about a potential takeover
(http://www.marketwatch.com/story/iwg-soars-after-confirming-takeover-talks-with-3-rival-bidders-2018-05-14).
EDP-Energias de Portugal SA (EDP.LB) jumped 9.3% after China
Three Gorges Corp. late Friday said it plans to launch a EUR9.07
billion ($10.8 billion) offer
(http://www.marketwatch.com/story/china-three-gorges-to-offer-108-billion-for-edp-2018-05-14)
to buy the almost 77% it doesn't already own in the Portuguese
utility company.
Shares in betting companies rallied following news of a U.S.
Supreme Court ruling
(http://www.marketwatch.com/story/shares-in-paddy-power-william-hill-climb-after-us-supreme-court-ruling-2018-05-14)
in favor of the state of New Jersey in a case that could open
sports betting around the nation. William Hill PLC (WMH.LN) jumped
11%, while Paddy Power Betfair PLC's stock added 12%.
Sanofi SA (SAN.FR) (SAN.FR) rose 1% and Ablynx NV (ABLX.BT)
inched 0.4% higher after the two companies said Sanofi's takeover
offer of the Belgian nanobody-focused company will go ahead as
planned
(http://www.marketwatch.com/story/sanofi-ablynx-deal-goes-ahead-2018-05-14-24853128).
Centrica PLC (CNA.LN) climbed 1.4% after the utility company
said it is on track to hit its targets for 2018
(http://www.marketwatch.com/story/centrica-on-track-to-hit-full-year-targets-2018-05-14).
ABN AMRO Group NV (ABN.AE) slumped 6% after the Dutch bank
reported a drop in net profit due to impairment charges of EUR208
million
(http://www.marketwatch.com/story/abn-amro-profit-falls-on-3-on-impairment-charges-2018-05-14).
Airbus SE (AIR.FR) dropped 2.4% after the plane maker said its
chief financial officer Harald Wilhelm has decided to leave the
company in 2019
(http://www.marketwatch.com/story/airbus-cfo-harald-wilhelm-to-leave-in-2019-2018-05-14-24851826).
Victrex PLC (VCT.LN) gave up 3.2% after chemical company said
currency movements are likely to be a headwind in fiscal 2019.
(END) Dow Jones Newswires
May 14, 2018 12:13 ET (16:13 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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