Europe’s main stock benchmark was under pressure on Tuesday, finishing the session in the red, as investors battled political worries across three regions, with the outcome of U.S. midterm elections front and center for investors.
What are markets doing?
The Stoxx Europe 600
SXXP, -0.26%
ended 0.3% lower at 362.55, its second straight loss after Monday’s decline near 0.2% decline.
The U.K.’s FTSE 100
UKX, -0.89%
slipped even further, closing down 0.9% at 7,040.68, while France’s CAC 40
PX1, -0.51%
dipped to finish 0.5% down at 5,075.19.
Germany’s DAX 30
DAX, -0.09%
suffered a little less, ending down 0.1% at 11,484.34, and Italy’s FTSE MIB Italy index
I945, -0.07%
also finished 0.1% lower at 19,268.29.
In Southern Europe, Greece’s ASX Composite
GD, +1.78%
bucked the trend with a gain of 1.8% to 629.84 at market close.
The euro
EURUSD, +0.0701%
inched up to $1.1414, compared with $1.1408 late Monday, while the British pound
GBPUSD, +0.3987%
rose to $1.3094 from $1.3042 late Monday.
What is driving the market?
Investors are closely watching the U.S. midterm elections, which are expected to drive financial markets on Wednesday. Gains or losses on Wall Street often also dictate the direction of global stock benchmarks.
Democrats are poised to wrest control of the House from Republicans who are tapped to keep their grip on the Senate. That split could make it tough on President Donald Trump’s legislative agenda.
Read: How traders are thinking about dollar wagers ahead of midterm elections, the Fed
Opinion: This is what’s happened to stocks after every midterm election since World War II
U.K. stocks slipped as the pound continued its Brexit hope-inspired rise. Senior ministers expect to reach a deal with the European Union this month, according to a report by the BBC. Earlier, however, U.K. Trade Minister Liam Fox said it was impossible to say whether a deal would be agreed this year.
Elsewhere, Italy’s Finance Minister Giovanno Tria said Tuesday his government hadn’t changed its budget proposal that was rejected by Brussels last month, and denied news reports saying he was presenting a new draft. He said discussions would carry on despite disagreements between Brussels and Rome, according to Reuters.
Meanwhile data from the eurozone shows a narrow beat for composite and services PMIs for October, while the September producer-price index rose to 4.5% on the year, versus 4.3% expected.
What are strategists saying?
“No strongly directional move is expected before the U.S. midterm election; the market is likely to be less and less volatile for the rest of the day in Europe, until the results get released,” said Pierre Veyret, technical analyst ActivTrades.
Stock movers
Banks and drug stocks were among the main Europe stock index’s biggest losers, with HSBC Holdings PLC
HSBC, -0.02%
HSBA, -0.59%
dropped to close 0.6% lower and Sanofi SA
SAN, -1.32%
finished down 1.3%.
Siemens Gamesa Renewable Energy
SGRE, +14.50%
was a top performer, with shares soaring 14.5% into the close after the manufacturer of wind turbines said it swung to a profit in the fourth quarter.
Weir Group PLC
WEIR, +5.06%
finished 5.1% higher after results and an upbeat outlook for the engineering company.
Shares of Wm Morrison Supermarkets PLC
MRW, -3.95%
slid near 4% on Tuesday after the grocery chain posted sales results.
Hugo Boss AG
BOSS, -2.37%
shares ended the session down 2.4%, after the luxury goods retailer reported a third-quarter profit fall due to hot weather.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.
Source : MTV
