European Stocks Succumb to Selling Pressure

By Modupe Gbadeyanka

European stocks succumbed to selling pressure on Monday as Germany faced a political crisis over immigration and trade worries persisted ahead of a July 6th deadline when the United States is due to impose tariffs on Chinese exports. Weak manufacturing data from China, Europe and the U.K. has also weighed on the markets.

While the German DAX Index has fallen by 0.4 percent, the U.K.?s FTSE 100 Index and the French CAC 40 Index are both down by 0.8 percent.

Nestle shares are marginally lower after U.S. activist investor Daniel Loeb ratcheted up pressure on the Swiss food giant to raise its financial returns and sell its stake in L’Oréal SA.

Cement giant LafargeHolcim has also moved to the downside. The company said it has terminated the liquidity enhancement agreement with Exane S.A. for its listing on Euronext Paris as of June 30, 2018.

Recordati shares have slumped after a consortium of investment funds led by private-equity firm CVC Capital Partners agreed to buy a stake in the Italian pharmaceutical company at a discount.

Airbus shares have declined in Paris. A report from Bloomberg said the global aerospace major will miss its delivery target for Pratt & Whitney-powered A320neo narrow-body jets this year after problems with the engines caused an almost three-month halt in shipments.

Germany’s ThyssenKrupp has also moved lower after signing a definitive agreement with Tata Steel to create a new company by combining their European steel businesses in a 50/50 joint venture.

On the other hand, software firm Micro Focus has jumped in London after announcing the sale of its SUSE business segment to Blitz 18-679 GmbH.

Vedanta Resources has also surged higher after chairman Anil Agarwal’s family trust agreed to buy the remaining minority stake in the company in a deal that values the mining conglomerate at 2.3 billion pounds.

In economic news, Eurozone factory activity grew at the weakest pace in more than a year in June, final data from IHS Markit showed.

The factory Purchasing Managers’ Index fell to an 18-month low of 54.9 in June from 55.5 in May. This was slightly below the flash estimate of 55.0.

Separately, survey results from IHS Markit showed that U.K. manufacturing sector growth remained subdued in June.

The IHS Markit/Chartered Institute of Procurement & Supply factory Purchasing Managers’ Index rose slightly to 54.4 in June from revised 54.3 in May. The score was almost four points below the 51-month high reached in November 2017.