Yahoo Finance MarketPulse Europe - Stocks Struggle After ECB Hopes Fuel 4-Month High
Investing.com -- Europe’s stock markets are edging lower Monday, struggling to build on a four-month high they hit on Friday on hopes of action from the European Central Bank to revive the economy.
ECB board member Benoit Coeure had said on Friday that the slowdown had been longer and deeper than expected, and that the bank is considering a new round of cheap long-term loans for the banking sector. That’s still supporting Spanish and Italian banks this morning, but for the rest of the market, the momentum has ebbed.
Optimism over U.S.-China trade talks appears to be largely nullified by a combination of weak domestic data and corporate uncertainty – due in part to the threat of President Donald Trump levying tariffs against European products instead.
Auto stocks continue to suffer after Bloomberg reported that Commerce Secretary Wilbur Ross submitted a report to President Donald Trump on whether vehicles made abroad pose a national-security risk. Trump has 90 days to respond and another 15 days to act. A report last week from German think-tank Ifo said the effects of tariffs on Germany’s exports to the U.S. would be severe.
At 04:40 AM ET (0940 GMT), the benchmark Euro Stoxx 50 was down 4.6 points, or 0.1% at 3,236.65.
The U.K. FTSE 100 was down 0.3%. The bright spot was consumer goods group Reckitt Benckiser (LON:RB), which rose 4.7% after raising its dividend after reporting a general improvement across its businesses.
The standout performer in Europe Monday morning is payments provider Wirecard (DE:WDIG), soaring 12% after German regulator Bafin banned short-selling the stock for two months. Wirecard has been buffeted by a couple of Financial Times reports alleging manipulative accounting practices in its fast-growing Asian business. The company has denied the reports. Bafin didn’t express a view on their credibility in its statement.
"There is a risk that an impact exerted on the share price of Wirecard AG as a result of net short positions being entered into or existing net short positions being increased will cause excessive price movements in the share price of Wirecard AG, given this company's importance for the economy," Reuters quoted Bafin as saying. Wirecard has still fallen over 30% since the FT published its reports.
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