By Sara Sjolin, MarketWatch

Euro rises after doubts over Trump's agenda build

European stocks fell Monday by the most in a month, alongside a slide for global equities, as investors continued to worry the Trump administration will not be able to push through its reforms.

The Stoxx Europe 600 index lost 0.6% to 374.18, setting it on track for largest one-day percentage drop since Feb. 24, according to FactSet data.

On Friday, the pan-European benchmark dropped 0.2% to end 0.5% lower for the week, as it became clear U.S. President Donald Trump was running into difficulties getting approval for his repeal to Obamacare. That sparked concerns Trump will struggle to follow through on other election promises, such as corporate tax cuts, the prospect of which has helped drive a recent rally in stocks.

Read:Debt limit looks like a real struggle after health bill debacle (http://www.marketwatch.com/story/debt-limit-looks-like-a-real-struggle-after-ahca-debacle-2017-03-24)

Later the same day, after the European markets closed, Republican leaders pulled their health-care bill from a House of Representatives vote.

"Equity valuations have been underpinned by the Trump reflation trade since November, but the failure of the healthcare bill raises major doubts about the strength of the administration and risks unwinding all the gains that the market has seen over the past five months," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, in a note.

Sectors bruised: Banks, which have particularly benefited from the reflation trade, were among biggest decliners in Europe on Monday.

Shares of Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) dropped 2.2%, UBS Group AG (UBS) fell 2%, Deutsche Bank AG (DBK.XE) (DBK.XE) lost 1%, and Société Générale (GLE.FR) gave up 1.5%.

The risk-off trade also hit miners and oil companies, with shares of metals giant Glencore PLC (GLEN.LN) down 2.6% and energy heavyweight Royal Dutch Shell PLC (RDSB.LN)(RDSB.LN) off 0.7%.

Oil prices dropped 0.6% to $47.67, as concerns over rising U.S. rig counts (http://www.marketwatch.com/story/oil-prices-fall-as-worries-over-global-supply-resurface-2017-03-27)outweighed chatter that the Organization of the Petroleum Exporting Countries may extend its production cuts.

Read: OPEC urges members to uphold oil production cuts (http://www.marketwatch.com/story/opec-urges-members-to-uphold-oil-production-cuts-2017-03-26)

Individual indexes: The commodity- and bank-heavy FTSE 100 dropped 0.7% to 7,282.89 in London (http://www.marketwatch.com/story/ftse-100-falls-to-1-month-low-as-fading-trump-trade-hits-banks-2017-03-27), setting it on track for its lowest close in almost a month.

Germany's DAX 30 index gave up 0.8% to 11,962.01, while France's CAC 40 index lost 0.5% to 4,995. Italy's FTSE MIB index was down 0.8% at 20,022.75.

Economic news: Business sentiment in Germany has improved in March, as the Ifo business climate index rose to 112.3 points, up from 111.1 in February. Economists had expected a reading of 111.1 for March.

The euro traded at $1.0857 (http://www.marketwatch.com/story/dollar-hits-lowest-level-against-yen-since-late-november-2017-03-27), compared with $1.0800 late Friday in New York, as the dollar lost ground (http://www.marketwatch.com/story/dollar-hits-lowest-level-against-yen-since-late-november-2017-03-27) against major currencies.

 

(END) Dow Jones Newswires

March 27, 2017 05:54 ET (09:54 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Feb 2024 to Mar 2024 Click Here for more FTSE 100 Charts.
FTSE 100
Index Chart
From Mar 2023 to Mar 2024 Click Here for more FTSE 100 Charts.