Europe close: Stocks retreat ahead of Fed meeting amid trade tensions
Stocks on the Continent started the week moderately lower, amid heavy losses in Basic Resources and Technology issues, with international trade frictions very much in focus ahead of a two-day G-20 finance ministers' meeting in Buenos Aires and ahead of the key US central bank policy meeting on Wednesday.
"A sharp decline in tech stocks, US political tension between and a ‘death cross’ on Germany’s benchmark DAX index were all weighing on sentiment. Investors are extra touchy in the lead up to Wednesday’s FOMC meeting and the first press conference from new Fed Chair Jerome Powell," commented Jasper Lawler, Head of Research at LCG.
To take note of, overnight US undersecretary of the Treasury for international affairs, David Malpass, incorrectly announced that his country had called off the US-China Comprehensive Economic Dialogue, but afterwards backtracked, Bloomberg reported.
Separately, on Sunday German finance minister Olaf Scholz said he was "seriously concerned" about trade frictions with the US, telling Bild that the foundation of our prosperity - free trade - was being put at risk.
Against that backdrop, by the closing bell the benchmark Stoxx 600 was trading lower by 1.07% or 4.03 points to stand at 376.01, alongside a 0.88% or 118.53 point fall on the German Dax to 12,271.72 and a 0.28% or 62.90 point decline on the FTSE Mibtel to 22,793.84.
In parallel, euro/dollar had reversed an earlier dip to finish 0.52% higher to 1.2351.
Also weighing on sentiment was a sharp drop in stock of Facebook - one of the most heavily-weighted tech companies in the States - following reports at the weekend that it might have mishandled the data of roughly 50m users.
Thus, the Stoxx 600 technology gauge fell back by 2.51% to 444.07, alongside a 2.71% drop in a subindex of Basic Resource companies' shares, while the subindex for lenders' shares succumbed to late selling, falling 1.0% to 179.58.
Weighing on the Basic Resources space and metals' prices, overnight China's National Bureau of Statistics reported that new home prices rose in 44 Chinese cities in February, down from 52 in January.
Ahead of that G-20 gathering, in an ECB sources report, on Monday morning Reuters said the debate among policy-makers in Frankfurt was increasingly about properly calibrating the correct path for interest rate expectations following a first increase in interest rates in mid-2019.
On the economic data front, ISTAT reported a much weaker-than-expected reading on the country's industrial output, which it said shrank by 1.9% month-on-month in January (consensus: -0.3%), led by an 8.6% drop in utilities output.
Meanwhile, according to Eurostat the euro area's trade surplus slipped from €23.2bn in December to €19.9bn for January. Economists had penciled-in a reading of €22.5bn.
Later in the day, Belgium's central bank reported an increase in its consumer confidence gauge to a reading of +3 for March from a print of +1 in the month before .
Meanwhile, in corporate news, Daimler was reportedly in the midst of a €3bn effort to ramp-up production from the 2.4m vehicles sold in 2017 to 3m units this year.
In France, oil major Total said it had been awarded a 40-year 20% interest in the Umm Shaif and Nasr concessions by Abu Dhabi's National Oil Company.
Further to the East, in Italy, US activist investor Elliott Advisors sent a letter to Telecom Italia shareholders asking for a "truly independent" board to be put in place to improve performance.