Maryam Cockar Sharecast | 20 Mar, 2017 12:16 - Updated: 12:32
Europe midday: Stocks weighed by G20 dropping commitment against protectionism
European equity markets were on the back foot at the start of the week as investors digested the G20 communiqué, which uses much softer language on trade protectionism compared with that in 2016, as the UK set a date to kick-start Brexit talks.
A Downing Street spokesperson said UK Prime Minister Theresa May would trigger Article 50 of the Lisbon Treaty on 29 March, starting the two-year talks for Britain to leave the European Union.
At midday, the benchmark Stoxx Europe 600 index was down 0.16% to 377.71, while Germany’s DAX fell 0.3% to 12,058.47 and France’s CAX was 0.31% weaker at 5,013.67.
The euro was up 0.17% verses the dollar to 1.0756, and flat against the pound at 0.86645. Brent crude was down 0.79% to $51.35 a barrel and West Texas Intermediate was 1.16% lower at $48.22.
In Baden-Baden, Germany, the group of 20 finance ministers' meeting dropped a reference to fighting trade protectionism in their joint statement.
This softer pledge followed opposition from the US, which left several leaders frustrated with the Trump administration’s stance on global trade, among them China, Japan, Russia, Germany and France.
“The uncertainties regarding the US’ relationship with the rest of the world weighed on equity traders’ sentiment," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
"As the world’s number one economy is preparing to set significant barriers against the world, investors are increasingly worried,” she said.
“How will the US protectionism affect the US companies’ overseas businesses and how much value would it shred from the US stocks’ value, if any?
"Will the US behaviour be a game changer for the international trade dynamics? How fast and by how much will the world’s giant close its doors to the rest of the world? And finally, given the actual developments, how long could the US defend its position as the world’s leader?”
Elsewhere, investors were also cautious ahead of the first televised debate between the five main presidential contenders in France.
Polls were settled on far-right Marine Le Pen making it to though the first round on 23 April, while popular centrist Emmanuel Macron had recently gained from the family expenses scandal surrounding Les Républicains’ candidate François Fillon.
Socialist Benoît Hamon and hard-left Jean-Luc Mélenchon were languishing in fourth and fifth place, respectively.
On the data front, German producer prices rose to 3.1% on the year in February, slightly below the 3.2% consensus and up from 2.4% the previous month. Producer prices were up 0.2% month-on-month in February, following a 0.7% rise in January.
In corporate news, Deutsche Bank fell 3.09% after it announced over the weekend it would raise €8bn in fresh equity via a sharply discounted rights issue. Germany's largest lender said it would price the 687.5m new shares at €11.65 for a 35% discount from last week’s close price.
On the upside, Hansteen Holdings was up 2.55% after it agreed to sell its German and Netherlands' portfolios for €1.28bn to entities owned by funds advised by affiliates of The Blackstone Group and M7 Real Estate. In addition, the company posted a dip on 2016 pre-tax profit but lifted its dividend.