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Oct. 18, 2018, 1:18 p.m. EDT

European bourses end the session in the red as global stocks turn lower

Novartis announces billion-dollar pharmaceutical deal

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By Mark DeCambre, MarketWatch , Anneken Tappe


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Europe’s main equity benchmarks finished Thursday’s session lower after spending much of the day trading higher thanks to better-than-expected corporate results.

But Europe appeared unable to a turn lower in U.S. stocks led by technology and communication-services.

What are markets doing?

The pan-European Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.63%  closed down 0.5% at 361.67, while the U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.81% slipped to close 0.4% down at 7,026.99, as Brexit worries continued to influence trade. For both benchmarks it was the worst point and percentage drop in a week.

Germany’s DAX 30 /zigman2/quotes/210597999/delayed DX:DAX +0.29%  was off 1.1% at the end of Thursday trading, reading 11,589.21 points, and France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.04%  fell 0.6% to 5,116.79 by the closing bell.

Italy’s FTSE MIB Italy index /zigman2/quotes/210598024/delayed IT:I945 +0.59%  ended 1.9% down at 19,087.53, amid turmoil over the country’s budgetary negotiations with the European Union.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.1729%  last traded at $1.1470, compared with $1.1502 late Wednesday in New York. The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1825%  was meanwhile down at $1.3043 from $1.3114.

Read: With ‘no-deal’ Brexit risk on the rise, analysts see uncertain path for pound

What is driving the market?

Market participants pointed to strength in a recent spate of earnings as one reason that European equity indexes were tracking slightly higher earlier in the session. But European stocks, which commonly take clues from the U.S. stock market, finished the day lower after U.S. equities turned red led by technology and communication-services names. On top of that, concerns around Britain’s continuing efforts to extricate itself from the EU, which appear to have been delayed amid a border impasse.

U.K. Prime Minister Theresa May on Wednesday during a closely watched summit in Brussels suggested that she was considering an extended Brexit transition period as the British leader failed to forge a new trade and customs pact as Britain is set to exit from the EU in March. An extension could see Britain remain under EU rules until 2021 or longer, according to reports.

A so-called no-deal scenario is looking increasingly likely European Council President Donald Tusk said earlier in the week, saying he harbored “ no grounds for optimism .” A no-deal could roil eurozone markets and produce sharp swings in the British pound.

Meanwhile, investors also watched discussions between antiestablishment 5 Star Movement and the far-right League over a full draft budget law that will be sent to the Italian parliament by Saturday, but which is expected to draw anger from EU officials because it would increase the country’s deficit and run afoul of EU fiscal rules. European Central Bank head Mario Draghi was quoted as saying that member states who didn’t respect the EU rules were risking high costs for everyone, according to Reuters.

What are strategists saying?

“Meanwhile in the eurozone, besides Brexit, Italy’s spending plans is another worrying issue for traders as recent comments from EU officials including the president of the European Commission, Jean-Claude Junker downplayed hopes for a breakthrough,” wrote Christina Parthenidou, investment analyst at XM in a Thursday research note.

What stocks are moving

Shares of Paris-based Carrefour SA /zigman2/quotes/208564127/delayed FR:CA -0.51% led pan-European gainers, ending the session more than 9% higher, after the supermarket company reported better-than-expected third-quarter sales.

LM Ericsson AB /zigman2/quotes/207544813/delayed SE:ERIC.B +0.99%  closed up 6.2% after the Swedish telecom gear maker beat estimates amid “momentum” for the 5G market.

Unilever PLC ’s /zigman2/quotes/205449809/delayed UK:ULVR +0.47% stock meanwhile slipped to end Thursday 0.9% lower even as the maker of Breyers ice cream and Dove shampoo sold more products at higher prices, helping it deliver stronger third-quarter revenue growth.

Novartis AG /zigman2/quotes/203286410/delayed CH:NOVN +0.42% raised its outlook on Thursday, and announced it would acquire radiopharmaceuticals company Endocyte Inc . in a deal that values it at $2.1 billion, Novartis’s latest effort to transform into a focused-medicines company. Novartis shares rose 1.9%.

/zigman2/quotes/210599654/delayed
XX : STOXX
440.04
+2.75 +0.63%
Volume: 0.00
Nov. 30, 2022 11:03p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,573.05
+61.05 +0.81%
Volume: 1.36M
Nov. 30, 2022 4:56p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
14,397.04
+41.59 +0.29%
Volume: 97,644
Nov. 30, 2022 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,738.55
+69.58 +1.04%
Volume: 137,628
Nov. 30, 2022 6:05p
loading...
/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
24,610.29
+144.34 +0.59%
Volume: 0.00
Nov. 30, 2022 5:36p
loading...
/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.0428
+0.0018 +0.1729%
Volume: 0.0000
Nov. 30, 2022 10:03p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2080
+0.0022 +0.1825%
Volume: 0.0000
Nov. 30, 2022 10:03p
loading...
/zigman2/quotes/208564127/delayed
FR : France: Euronext Paris
16.43
-0.09 -0.51%
Volume: 4.23M
Nov. 30, 2022 5:35p
P/E Ratio
12.42
Dividend Yield
3.17%
Market Cap
€12.10 billion
Rev. per Employee
€247,292
loading...
/zigman2/quotes/207544813/delayed
SE : Sweden: Stockholm
kr 65.12
+0.64 +0.99%
Volume: 17.08M
Nov. 30, 2022 5:29p
P/E Ratio
9.55
Dividend Yield
3.84%
Market Cap
kr215.94 billion
Rev. per Employee
kr2.54M
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/zigman2/quotes/205449809/delayed
UK : U.K.: London
4,144.00 p
+19.50 +0.47%
Volume: 10.92M
Nov. 30, 2022 4:43p
P/E Ratio
21.62
Dividend Yield
3.51%
Market Cap
£104.24 billion
Rev. per Employee
£322,051
loading...
/zigman2/quotes/203286410/delayed
CH : Switzerland: SWX
CHF 83.65
+0.35 +0.42%
Volume: 7.79M
Nov. 30, 2022 5:30p
P/E Ratio
9.27
Dividend Yield
3.71%
Market Cap
CHF182.72 billion
Rev. per Employee
CHF462,363
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Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre. Anneken Tappe is a markets reporter for MarketWatch. She is based in New York.

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