European Stocks Tick Lower On Fresh Strain to U.K. Ties
January 20 2020 - 5:49AM
Dow Jones News
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.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
January 20, 2020 05:34 ET (10:34 GMT)
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