European stocks drop by the close amid political uncertainty in Italy; Royal Mail slips 8%

Posted by On 5:36 PM

European stocks drop by the close amid political uncertainty in Italy; Royal Mail slips 8%

European stocks finished Tuesday's session deep in the red, amid political uncertainty in Italy and an unresolved trade dispute between the U.S. and China.

The pan-European Stoxx 600 closed down 0.52 percent, with the majority of sectors ending the day on a negative note. Basic resources outperformed, on the back of a rise in metal prices.

Looking at bourses, the U.K.'s FTSE 100 dipped 0.28 percent, France's CAC 40 tumbled 0.71 percent and Germany's DAX fell 0.42 percent. Most markets in peripheral Europe closed lower.

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Europe's banking index saw solid losses during Tuesday's trade, closing down 0.97 percent after a prominent Italian lawmaker said Rome would enjoy more favorable economic conditions outside the euro zone. Italy's FTSE MIB fell earlier in the session but pared those losses, to close slightly lower.

Claudio Borghi, a euroskeptic economist who chairs the budget committee of the lower house of Italy's parliament, said in a radio interview Tuesday that he was "truly convinced" most of the country's problems would be solved if it had its own currency.

Borghi's comments were quickly cont radicted by Italy's deputy prime minister, Luigi Di Maio, who said said Italy's coalition government did not want to leave the European Union or the single currency. Italian Prime Minister Giuseppe Conte also rebuffed the comments, saying the euro was "unrenounceable" for the country. Nonetheless, several of Italy's banks were trading lower Tuesday, with Unicredit, Ubi Banca and Banco Bpm all down 1.85 percent or more by the close.

Looking at individual stocks, Britain's Royal Mail slumped to the bottom of the European benchmark after the postal service company issued a profit warning on Monday. Shares of Royal Mail plummeted 8.38 percent on Tuesday, after a number of brokers cut their price targets on the stock.

Wienerberger meantime climbed to the top of the continental benchmark after the firm issued upbeat earnings gu idance, saying it foresaw an accelerated pace of growth and increased its medium-term targets. Shares of the firm jumped over 6 percent.

And shares of Ubisoft popped 3.5 percent, after Google announced Monday it planned to test a game-streaming service alongside the company.

Nafta 2.0

On Wall Street, stocks rose around Europe's close with the Dow hitting a record high in trade, supported by gains seen in Intel and optimism surrounding trade.

Investors continue to closely watch global trade developments, after the U.S. and Canada forged a last-gasp deal on Sunday to revamp NAFTA as a trilateral pact with Mexico. The accord rescued a $ 1.2 trillion open-trade zone that had been about to collapse after almost quarter of a century.

Attention however has swiftly turned once again to China, which is still engaged in a trade war with the U.S. Ratings agencies Fitch and Moody's on Tuesday warned of the ongoing threat of the trade dispute between the world's two largest economies. Fitch said it posed downside risks to 2019 growth projections while Moody's said U.S.-Sino trade tensions will escalate.

Meanwhile, over in Britain, a hotly anticipated speech by former U.K. Foreign Secretary Boris Johnson was met with applause at the reigning Conservative Party's annual conference, and was interpreted by observers as a potential leadership challenge to Prime Minister Theresa May. Johnson said in his speech that the country ought to "chuck" May's so-called Chequ ers plan, which he said was "politically humiliating." Sterling fell against the dollar during trade.

Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Source: Google News Italy | Netizen 24 Italy

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