Sep 29, 2020

European Markets Closing Report: European markets close lower with Brexit and U.S. politics on the agenda


Elliot Smith

LONDON — European markets retreated Tuesday, pulling back from Monday's rally with Brexit talks and the first U.S. presidential debate on investors' radar.

The pan-European Stoxx 600 closed down by 0.5%. Banks shed 2.1% while utilities bucked the broad downward trend to add 0.5%.

The cautious session follows mixed trading in Asia-Pacific overnight, where mainland Chinese and South Korean shares advanced while stocks in Hong Kong and Australia retreated slightly.

Stateside, stocks fell slightly on Tuesday as the market took a breather following a sharp rally in the previous session. Investors are preparing for the first presidential debate between President Donald Trump and Democratic challenger Joe Biden, with a clear victory for either party likely to cause some market movement.

Markets were still cognizant of the continuing spread of the coronavirus worldwide, with the global death toll now exceeding 1 million with more than 33 million confirmed cases, according to data compiled by Johns Hopkins University.

Investors also had an eye on progress toward a fresh fiscal stimulus package in the U.S., with House Speaker Nancy Pelosi announcing on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package, smaller than initially proposed but still well above what Republican leaders have offered.

Back in Europe, the U.K. and the European Union have indicated that a Brexit deal is still some way off after negotiations recommenced Monday over implementing their Withdrawal Agreement, which British Prime Minister Boris Johnson's government has sought to renege on.

In corporate news, the bitter fallout from LVMH's soured $16 billion acquisition of Tiffany continues, with the Louis Vuitton owner countersuing the U.S. jeweler on Monday and arguing that Tiffany's financial management during the coronavirus crisis nullifies the purchase agreement.

On the data front, final euro zone economic sentiment rose to 91.1 in September from 87.5 in August, European Commission figures showed Tuesday, while sentiment in the U.K. rose to 83.0 from 75.1.

In terms of individual share price action, British plumbing and heating distributor Ferguson climbed 6.4% after restoring its dividend as cost cuts helped the company boost full-year profits.

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