By Carla Mozee and Sara Sjolin, MarketWatch
Brexit bill up for debate again in U.K. parliament
European stocks finished lower Monday, with mining shares
pulling back as Chinese economic data highlighted concerns
surrounding a global trade war. Bank stocks advanced however, as
Deutsche Bank AG offered a brighter outlook for its upcoming
earnings report.
How are markets performing?
The Stoxx Europe 600 index fell 0.3% to close at 384.06, erasing
a 0.2% gain from Friday
(http://www.marketwatch.com/story/european-stocks-hold-to-small-gain-as-techs-rise-with-eye-on-us-bank-earnings-2018-07-13).
Germany's DAX 30 index tacked on 0.2% to 12,561.02, supported by
Deutsche Bank shares, which rose on Monday.
The U.K.'s FTSE 100 index ended 0.8% lower to close at 7,600.45,
weighed in part by mining and oil stocks.
France's CAC 40 index closed 0.4% lower at 5,409.43.
In currencies, the euro rose to $1.1706 from $1.1685 late Friday
in New York. Britain's pound fell to $1.3227, up from $1.3234.
What is driving the market?
European stocks had a sluggish start to the week as trading got
under way, with mining stocks being dragged down after data showed
China's gross domestic product slowed slightly in the second
quarter. The Stoxx Europe 600 Basic Resources Index fell 1% on
Monday.
Second quarter growth in China -- the largest consumer of
industrial metal copper -- came in at 6.7%,
(http://www.marketwatch.com/story/china-growth-slows-slightly-in-second-quarter-2018-07-16)
the slowest rate since the third quarter of 2016, as Beijing
continued efforts to stoke deleveraging at financial
institutions.
While the growth numbers were in line with expectations, they
raised questions about the health of the Chinese economy, the
world's second largest, as its trade spat with the U.S., including
retaliatory tariffs, continues. The U.S. government last week said
it's looking to expand its import tariffs against Chinese goods to
$200 billion in products.
"Equities are not yet discounting a trade-war scenario and we
see a 20% plus decline driven by a combination of lower earnings
and multiple contraction. Markets have started to discount the risk
following recent announcements and we estimate that Asia is already
discounting our escalation scenario," said Tao Wang, head of Asian
economic research at UBS, in a research note published Monday.
"We see U.S. and European equity markets declining 10% and 7%,
respectively, in our Escalation Scenario, suggesting that this is
not yet fully priced in," Wang wrote.
Europe, China and the U.S. have a duty "not to start trade
wars," said European Council President Donald Tusk on Monday at a
summit between European Union and Chinese officials in Beijing.
President Donald Trump called the EU "a foe"
(http://www.marketwatch.com/story/trump-the-european-union-is-our-foe-2018-07-15)
of the U.S. in an interview with CBS Evening News that aired
Sunday.
Read: These are the retail brands that will be hurt most by
Chinese tariffs
(http://www.marketwatch.com/story/these-are-the-retail-brands-that-will-be-hurt-most-by-chinese-tariffs-2018-07-12)
Also:Here's when Americans will start feeling the pain from
escalating Trump-imposed tariffs
(http://www.marketwatch.com/story/heres-when-americans-will-start-feeling-the-pain-from-escalating-trump-imposed-tariffs-2018-07-11)
European bank stocks overall received a boost Monday as Deutsche
Bank AG (DBK.XE) (DBK.XE) shares rallied 7.3% on the German
lender's projection that profit and revenue will surpass consensus
expectations in the second quarter
(http://www.marketwatch.com/story/deutsche-bank-projects-q2-profit-above-consensus-2018-07-16).
Stock movers
In the mining group, Glencore PLC (GLEN.LN) closed down 1.3%,
Boliden (BOL.SK) gave up 1.7%, and BHP Billiton PLC (BLT.LN)
(BHP.AU) (BHP.AU) ended 2.5% lower. Steel maker ArcelorMittal SA
(MT) shed 1.3%.
Indivior PLC (INDV.LN) finished 17% higher after the drug maker
late Friday said it won a preliminary injunction against Dr.
Reddy's Laboratories Ltd
(http://www.marketwatch.com/story/indivior-wins-prelim-injunction-vs-dr-reddys-2018-07-16).
(500124.BY) (500124.BY) over a product that treats opioid
dependence.
Hargreaves Lansdown (HL.LN) ended 1.9% lower after the U.K.
Financial Conduct Authority
(https://www.fca.org.uk/publications/market-studies/ms17-1-investment-platforms-market-study)said
it's considering banning exit fees from online investment
platforms.
Micro Focus International PLC (MCRO.LN) lost 2.9% after Credit
Suisse reportedly cut its rating on the software maker.
Brexit bill under debate
A new round of voting is expected to start Monday in the U.K.
House of Commons on amendments to the bill that will take Britain
out of the European Union. They will be the first votes on
amendments related to trade after U.K. Prime Minister Theresa May
won support for a soft-Brexit strategy from her cabinet when they
met at Chequers earlier this month. That approach includes
negotiating for frictionless trade in goods between the U.K. and
the EU.
But May's vision moving forward prompted resignations by chief
Brexit negotiator David Davis and Foreign Secretary Boris Johnson,
among others, and Monday's votes face the prospect of rebellion by
members of May's Conservative Party.
"We need to keep our eyes on the prize. If we don't, we risk
ending up with no Brexit at all," said May, in a Facebook post on
Sunday, warning critics of her strategy.
(http://www.marketwatch.com/story/uk-leader-theresa-may-warns-of-no-brexit-at-all-if-politicians-fail-to-come-together-2018-07-16)
Former Foreign Secretary Johnson wrote in an article published
Monday in the Telegraph newspaper
(https://www.telegraph.co.uk/politics/2018/07/15/rest-world-believes-britain-time-did/)
that Britain should "militate ceaselessly for free trade deals" and
said the U.K. needs to believe it can stand strong in a post-Brexit
environment.
(END) Dow Jones Newswires
July 16, 2018 12:05 ET (16:05 GMT)
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