European shares are trading lower shortly after midday Monday, as the investor tone is more downbeat and indices follow the global markets into the red. US stocks closed sharply lower Friday, while political news is also weighing on stocks.
By 1230 BST, the broad EUROSTOXX 600 was 1.55% lower and the EUROSTOXX 50 was off 1.29%. Regional bourses fared no better. The German DAX was down 0.93%, the French CAC was 1.27% in the red, while the Spanish IBEX lost 1.36%.
Global stock sell-off dominates investor tone
The US S&P 500 ended some 2.12% lower, Friday. That move came as the US jobs report showed earnings rose by more than expected. That, in turn, fuelled rate hike speculation which pushed bond yields higher.
When bond yields rise, some investors prefer to switch out of stocks into bonds, to take advantage of better returns. And that’s something that is continuing, Monday.
Also weighing on stocks in Europe, is news that German political negotiations between Angela Merkel and the Social Democrats broke down, Sunday.
Talks are expected to resume. However, investors remain uncertain over whether enough progress can be made to forge an acceptable agreement between the two parties.
As expected, there are a lot of stocks in the red, Monday. Among them is Ryanair, with investors showing uncertainty over potential pilot union-related disruptions detailed by CEO Michael O’Leary. The fall comes despite the budget airline reporting positive Q3 results.
Ryanair shares were 2.05% lower at €15.81.
Leonardo shares fell 3.56% to €9.26 as UBS cut its rating for the Italian based tech, defense group, to ‘neutral’ from ‘buy’.
Sandvik shares were 0.65% sown at SEK149.25, despite announcing some better-than-expected figures in its results.
Other fallers include:
- Air France shares down 2.22% at €11.88.
- Lufthansa shares off 0.50% at €27.94.
- Prosiebensat 1 Media shares 1.63% lower at €29.48.