Europe open: Stocks on the back foot; Deutsche slumps

European stocks fell in early trade, taking their cue from a negative session in Asia as investors eyed this week’s OPEC meeting in Algeria and a debate later in the day between Hillary Clinton and Donald Trump.

At 0840 BST, the benchmark Stoxx Europe 600 index was down 1%, Germany’s DAX was off 0.9% and France’s CAC 40 was 1.2% weaker.

Meanwhile, oil prices were a touch higher after Algeria’s energy minister Noureddine Bouterfa said on Sunday that all options for a production cut or freeze at this week’s OPEC meeting were on the table. Bouterfa said: "We will not come out of the meeting empty-handed.”

Oil prices had tumbled at the end of last week amid reports that Saudi Arabia was not expecting a deal to be made the meeting.

West Texas Intermediate was up 0.6% at $44.74 a barrel and Brent crude was 0.5% higher at $46.10.

Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said: “European markets have started the week lower, following Asian markets down, despite a slight recovery in oil prices. The rally in markets started to come unstuck on Friday after investors became significantly more bearish about the prospect of any OPEC deal, with short positions escalating sharply. While oil prices have bounced slightly this morning on hopes that Saudi Arabia may be prepared to cut output at a later date, fears are growing that oversupply in the oil market will subdue prices for the foreseeable future.

“Possibly the most significant risk event for markets this year, the US election is already compelling and tonight's first televised US Presidential debate is likely to prove must-watch TV. So far, the only markets and sectors to pay much attention to the upcoming election are US healthcare stocks and Mexican assets - but with a little over a month before November's vote, investors need to start trying to establish what the result might mean for markets more widely.”

In corporate news, German specialty chemicals group Lanxess rallied after saying it was buying Chemtura for about $2.12bn in cash.

Deutsche Bank was under the cosh, however, following a report in German magazine Focus suggesting that the country’s government has ruled out state aid for the lender.

Swiss-Irish food group Aryzta was also lower after the company reported an 8% drop in pre-tax profit for the 12 months to the end of July.

Icap was on the back foot after it said that highly experienced operating director Ken Pigaga has had second thoughts about moving to Tullett Prebon along with colleagues as part of its voice broking acquisition.

Lloyds was under the cosh after a downgrade by Goldman Sachs, while Hays and InterContinental Hotels were hit by downgrades from RBC Capital Markets and Morgan Stanley, respectively. Shire was also in the red as HSBC downgraded the stock to ‘hold’ from ‘buy’.