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UPDATE 1-European shares fall for first time in four sessions


Reuters
Updated: 03-09-2019 14:23 IST
UPDATE 1-European shares fall for first time in four sessions

Image Credit: PxHere

European shares fell for the first time in four sessions on Tuesday, as uncertainty over Britain's chaotic exit from the European Union and trade tensions between the United States and China weighed on sentiment. British lawmakers will decide on Tuesday whether to move the country one step closer to a snap election when they vote on the first stage of their plan to block Prime Minister Boris Johnson from pursuing a no-deal Brexit.

"There is a lot of uncertainty there, as Boris Johnson aims for new elections. The question then is if the parliament will be on time to pass a bill to make sure that a hard Brexit can't occur," said Teeuwe Mevissen, senior market economist at Rabobank. The pound fell to its lowest since January 2017, helping the export-laden FTSE 100 outperform other European markets with a 0.07% rise.

The pan-European STOXX 600 index declined 0.39% by 0750 GMT. The United States and China are struggling to schedule a meeting this month to renew trade talks after Washington rejected Beijing's request to delay tariffs that took effect over the weekend, Bloomberg reported on Monday.

"If they're struggling to decide simple itinerary, expectations for anything tangible to arise from the trade talks are looking incredibly dim at this point," said Stephen Innes, Asia Pacific market strategist at AxiTrader. The rising worries encouraged investors to shift away from risky equities to safe-haven assets such as government bonds, resulting in yields on German and Italian 10-year bonds hitting a record low.

All the major European sectors were in the red, with travel and leisure stocks posting the steepest fall of 0.65%. The sector was pressured by a 2.5% fall in shares of airline easyJet after Kepler Cheuvreux downgraded to 'reduce' from 'hold'.

Investor attention now shifts to the European Central Bank's meeting next week, where it is widely expected to cut interest rates to counter the impact caused by the trade war that has roiled financial markets and led to the benchmark STOXX index ending August 1.6% lower. Ferguson jumped 2.44% and was the biggest gainer on the STOXX 600, after the British plumbing products distributor said it will separate its UK operations to focus on its North American business.

Also Read: UPDATE 1-UK lawmakers opposed to no-deal Brexit to bring forward legislation

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)