2 Months : From Dec 2019 to Feb 2020
By Anna Hirtenstein
European stocks drifted down Monday after a top U.K. government official warned that the country would no longer be aligned with European Union rules and regulations after Brexit.
The pan-continental Stoxx Europe 600 index slid 0.2%, with the U.K.'s FTSE 100 gauge also slipping about 0.2%. U.S. stock futures were largely flat with contracts tied to the Dow Jones Industrials Average Index edging down 0.1% on a day when U.S. markets will be closed for Martin Luther King Jr. Day.
In an interview with the Financial Times, the U.K.'s Chancellor of the Exchequer Sajid Javid urged businesses to prepare for a new operating environment as the country won't be in the single market or the customs union by the end of the year. His comments prompted concern among car markers and other manufacturers about the potential for new hurdles to exports when the transition period ends in December.
The pound slipped 0.3% against the dollar to trade at $1.2974.
"The Chancellor continues to firmly suggest there's been no headfake from them and there's an intention to allow the U.K. to diverge from EU rules and regulations and have less of a close trading relationship," said James Athey, a senior investment manager at Aberdeen Standard Investments. "That's negative news to some: we're seeing the sterling and European risk assets moving down a bit."
In Asia, the Shanghai Composite Index closed 0.7% up after the People's Bank of China left its benchmark lending rates unchanged for the second straight month.
Oil prices rallied after a key export pipeline in western Libya was blocked, forcing additional production cuts a day after a port blockade had already halved the country's output. Brent crude, the global benchmark for oil, advanced as much at 1.3% to $65.72, the highest since mid-December, before trading up 0.5%.
Later in the day, European Central Bank President Christine Lagarde is scheduled to give a talk that may offer fresh insights into her thinking about monetary policy for the region. The International Monetary Policy's report on the global economic outlook will also be released from Davos, Switzerland, where world and business leaders are convening this week.
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(END) Dow Jones Newswires
January 20, 2020 05:34 ET (10:34 GMT)
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