Business News

Strong euro weighs on European stocks

London, Nov 27 (AFP/APP):Eurozone stocks closed lower Monday as the euro remained strong amid hopes that German Chancellor Angela Merkel is close to forming a government, dealers said.
London equities also showed losses at the closing bell as investors worried about apparently stalled Brexit talks, and a rising pound took its toll on exporters.
“European equity markets are mostly lower in afternoon action, with the euro tacking onto a recent rally to a two-month high versus the US dollar,” said analysts at the Charles Schwab brokerage.
But the continent’s equity markets were lifted off earlier lows by Wall Street posting gains approaching midday in New York thanks to upbeat signs about the holiday shopping season.
Early online shopping data suggested the “Black Friday” start to the gift-shopping season was a boon for stores, and shares in Amazon, Wal-Mart and Macy’s all rose in response.
– Stability would be nice –

Back in Europe, Merkel has been scrambling to avert snap elections after talks to form a new government with the pro-business Free Democrats (FDP) and the left-leaning Greens broke down a week ago.
The Social Democrats had vowed to go into opposition after a disappointing showing in September, but in a U-turn on Friday SPD chief Martin Schulz said he was ready for talks with Merkel’s bloc.
“Political optimism is picking up in Germany,” added analyst David Madden at CMC Markets.
“The Germany economy has been managing just fine without a functioning government for the past two months, but investors would welcome some political stability.”
An improving outlook for a functioning German government boosted the euro, but the currency’s strength weighed on export-oriented stocks which stand to suffer from a strong euro.
The European currency gave up some of its early gains by the end of the European trading day but remains close to highs seen in September, analysts at Mirabaud Securities said.
“The euro’s strength is the key factor,” they said.
Asian markets fell Monday on profit-taking after last week’s volatility.
Shanghai slipped almost one percent, with dealers still on edge after Thursday’s sharp losses fuelled by concerns about a crackdown on speculative trading.

– Key figures around 1640 GMT –

London – FTSE 100: DOWN 0.4 percent at 7,383.90 points (close)
Frankfurt – DAX 30: DOWN 0.5 percent at 13,000.20 (close)
Paris – CAC 40: DOWN 0.6 percent at 5,360.09 (close)
EURO STOXX 50: DOWN 0.5 percent at 3,564.02 (close)
New York – DOW: UP 0.1 percent at 23,591.04
Tokyo – Nikkei 225: DOWN 0.2 percent at 22,495.99 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 29,686.19 (close)
Shanghai – Composite: DOWN 0.9 percent at 3,322.23 (close)
Euro/dollar: DOWN at $1.1922 from $1.1933 at 2200 GMT
Pound/dollar: UP at $1.3341 from $1.3338
Dollar/yen: DOWN at 110.91 yen from 111.53 yen
Oil – Brent North Sea: DOWN 58 cents at $62.89 per barrel
Oil – West Texas Intermediate: DOWN $1.20 at $57.75