EUROPE MARKETS: Banks Lead European Stocks Lower As Trump Rally Falters
March 27 2017 - 10:18AM
Dow Jones News
By Sara Sjolin, MarketWatch
Euro rises after doubts over Trump's agenda build
European stocks fell Monday by the most in almost two months,
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 0.8% to 373.46, setting it on
track for the largest one-day percentage drop since Jan. 30,
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 of
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 health-care 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.
Read:These 5 charts show how Trump's health-care flop is hitting
markets
(http://www.marketwatch.com/story/these-5-charts-show-how-trumps-health-care-flop-is-hitting-markets-2017-03-27)
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%, UBS Group AG (UBS) fell 1.8%, Deutsche Bank AG (DBK.XE)
(DBK.XE) lost 2.1%, and Société Générale (GLE.FR) gave up 1.7%.
The risk-off trade also hit miners and oil companies, with
shares of metals giant Glencore PLC (GLEN.LN) down 4.3% and energy
heavyweight Royal Dutch Shell PLC (RDSB.LN)(RDSB.LN) off 1.2%.
Oil prices dropped 1.6% to $47.20, 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 1% to 7,264.84 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 1.1% to 11,931.45, while France's
CAC 40 index lost 0.5% to 4,994.64. Italy's FTSE MIB index was down
1.2% at 19,951.71.
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.
Separately, European Central Bank board member Sabine
Lautenschläger said the bank should prepare to tighten policy as
soon as the economic data are stable
(http://www.marketwatch.com/story/ecb-should-get-ready-to-tighten-policy-lautenschlager-says-2017-03-27).
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 10:03 ET (14:03 GMT)
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