Europe open: Stocks fall as investors mull Trump policies; deal news provides some cheer

European equity markets lost ground in early trade as investors digested US President Donald Trump’s curb on refugees and his travel ban on arrivals from predominantly Muslim countries, although there were a few bright spots in terms of deal news.

At 0850 GMT, the benchmark Stoxx Europe 600 and France’s CAC 40 were down 0.6%, while Germany’s DAX was 0.5% lower. Meanwhile, West Texas Intermediate was down 0.2% to $53.08 a barrel and Brent crude was off 0.5% at $55.26.

On Friday, Trump put a 120-day hold on allowing refugees into the country, an indefinite ban on any refugees from Syria and a 90-day ban on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. The ban also applies to anyone with dual nationality including any of those countries.

Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said: “European markets are lower this morning as President Trump's immigration ban reverberates across the globe. Thus far, the market has been keen only to concentrate on the positives of the Trump administration and ignore the potential negatives, but the global reaction to the immigration ban has finally seen investors sit up and take notice.

"The risk premium associated with the new administration is not insignificant and this is the first sign that markets may have potentially overlooked some of the risks associated with the presidency since the November vote.”

Energy and basic-resource shares were the worst performers as crude and copper prices retreated, with the Stoxx 600 sub-indexes for the sectors down 1.2% and 1.4%, respectively.

On the corporate front, FTSE 100 telecoms group Vodafone was in the black after confirming it is in talks over merging its Indian business with Idea Cellular, which is part of the Aditya Birla Group.

Engineer WS Atkins was a higher riser following a report in The Times that it has been approached by US company CH2M for a possible $4bn merger.

Randgold Resources fell despite saying it was confident of topping production guidance of 670,000 oz of gold for 2016 from its Loulo-Gounkoto mining complex in Mali, with another record quarter at the end of the year.

Lloyds Banking Group was also in the red after the UK government cut its stake in the bank to just under 5%, or 3.57bn shares, as it looks to take the bank private again in the next few months. This is down from 4.24bn shares previously.