Europe midday: Stocks under pressure as political risks intensify
Stocks are seeing modest losses, tracking a retreat on Wall Street overnight even as investors continue to keep an eye on European politics, with the spotlight currently on Italy and Spain.
Also weighing on sentiment, news surfaced overnight that the US might be mulling placing curbs on exports of high-technology products to China, especially those known as 'dual use' technology, meaning that they have both civilian and military applications.
That followed an acrimonious summit of APEC nations at the weekend at which China reportedly balked at any reference being made in the post-meeting summit to a commitment to avoid all unfair practices between nations in the region.
"Fears of an escalation in trade tensions after China alleged antitrust behaviour on the part of Micron Technology, and Samsung Electronics didn’t help, while expectations of some form of trade détente at next week’s G20 meeting between China and the US were knocked after US vice President Mike Pence was particularly critical of Chinese trade tactics," said Michael Hewson at CMC Markets UK.
Investors were also watching the headlines around Brexit, with various analysts pointing out the risk that the withdrawal proposal would, at least initially, be voted down in Parliament.
As of 1203 GMT, the benchmark Stoxx 600 was down by 0.50% or 1.79 points to 353.32, alongside a fall of 0.82% or 92.57 points to 11,151.90 for the German Dax while the FTSE Mibtel was declining by 0.78% or 147.74 points to 18,675.51.
Linked to the latter, 10-year Italian government notes rallied following, erasing early losses and pushing yields back down to 3.61% after hitting an intra-day high of 3.72%.
That followed a round of selling the day before as investors positioned for a possible European Commission announcement, on Wednesday, that it would open an excessive deficit procedure against Rome.
Regarding Spain meanwhile, analysts at Rabibank noted talk in the local press that the minority Socialist government might be tempted to call early elections, likely for May 2019, so they coincide with municipal, regional and European elections.
Local elections are scheduled in the southern region of Andalucia for 2 December.
In the background meanwhile, Bitcoin was slumping 16.35% to $4,377.44.
On the company front, shares of Renault were adding to their losses from the prior session.
Stock in BASF was also lower even after it announced a revamp that was meant to boost the chemical giant's bottom line by €2bn from 2021.
The economic data calendar was rather light on Tuesday.
According to INSEE, French unemployment was steady during the third quarter in comparison to the prior three-month stretch at 9.1% (consensus: 9.0%).
Over in Germany, the Federal Office of Statistics reported an acceleration in the rate of gain in factory prices from a 3.2% pace year-on-year for September to 3.3% in October, as expected by the consensus.
Still ahead for later in the day, the Belgian central bank was due to publish its consumer confidence index for the month of November, at 1400 GMT.
Stateside meanwhile, at 1330 GMT the National Association of Realtors was scheduled to publish housing starts and permits data for the month of October.