Europe open: Shares lower on Brexit worries, US/China tensions
European shares were slightly lower at the opening on Monday as investors eyed the ongoing Brexit talks drama and increased tensions between the US and China.
The pan-European Stoxx 600 index was down 0.56%, while the UK FTSE 100 gained as Brexit worries hammered the pound, benefiting the index’s exporters.
“Another weekend full of contradictory Brexit headlines has left the pound worried and in the red this Monday morning,” said Spreadex analyst Connor Campbell.
“Despite EU claims that there has been a breakthrough over fishing rights – something in and of itself denied by UK sources – Monday’s reports have (UK Prime Minister) Boris Johnson ready to abandon negotiations ‘within hours’.”
While most of the focus has been on the fishing industry, largely insignificant in terms of its economic weight, the main sticking point appeared to be on divergence from EU rules in any future trade relationship. France indicated it was happy for the UK to have some room to manoeuvre but only if there was a sanctions regime in place if Britain moved too far.
There was also investor concern after a report from Asia overnight that the US was ratcheting up tensions with China and preparing to hit more Beijing officials with sanctions over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong.
In equity news, shares in house builders were all lower on Brexit concerns, with Berkeley, Persimmon, Barratt, Vistry and Bellway all in the red.
Shares in Games Workshop rose as the miniature wargames maker declared a dividend of 60p a share as the upgraded its first-half profit forecast for the third time in three months.
Frasers Group lost ground after confirming it was in talks with administrators of retail chain Debenhams on a potential rescue, but warning that "time is short" to do a deal.