European shares closed lower on Thursday, with bank and commodity stocks among the biggest decliners of the day as skepticism grew about an olive branch recently offered by the European Union’s top Brexit negotiator.
Italian stocks also were among the day’s biggest decliners amid continued concerns over the budget that the new government is to propose next month.
Where are the major benchmarks trading?
The Stoxx Europe 600 Index /zigman2/quotes/210599654/delayed XX:SXXP +1.57% fell 0.3% to 385.36. Despite the dip, the pan-European index remains up 0.5% in what would be its second straight weekly gain.
For the month of August, it is down 1.6% and on track for its weakest monthly performance since March.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0183% fell against the dollar, trading at $1.1650, compared with $1.1709 late Wednesday.
Germany’s DAX /zigman2/quotes/210597999/delayed DX:DAX +2.24% dropped 0.5% to 12,494.24. For the week, it is up 0.8% in its second straight weekly climb. For the month, however, it is down 2.4%.
France’s CAC 40 Index /zigman2/quotes/210597958/delayed FR:PX1 +1.44% fell 0.4% to 5,478.06. For the week, it is up 0.8%, although it is looking at a 0.6% decline for August.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +2.90% fell 0.6% to 7,516.03, building on a similar drop in the previous session. On Thursday, the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0803% traded at $1.2997, compared with $1.3028 late Wednesday.
For the week, the FTSE is down 0.8%, a decline that has taken it near its lowest levels since May. For August, it is down 3%, on track for its biggest decline since February.
What’s driving trading?
Investors continued to focus on recent comments made by EU negotiator Michel Barnier, who reportedly said the bloc was willing to offer the U.K. an unprecedented partnership, “such as has never been with any other third country.”
The news was taken as a sign that the U.K. may be able to avoid a “no-deal Brexit,” although the specifics remain to be seen and the negotiating process has been fraught with delays. Barnier also emphasized that the EU wouldn’t accept any deal that harms the single market.
A meeting slated for Friday between Barnier and U.K. Brexit Secretary Dominic Raab will be closely watched by investors.
Separately, there continues to be a great deal of concern surrounding Italy as the country prepares a budget that could run afoul of the EU’s deficit rules. The country’s FTSE MIB stock index /zigman2/quotes/210598024/delayed IT:I945 +1.39% dropped 1.3%, with its banks leading the slump. Unione di Banche Italiane SpA /zigman2/quotes/200732627/delayed IT:UBI +2.37% tumbled 2.6% and UniCredit SpA /zigman2/quotes/200769686/delayed IT:UCG +1.68% was off 1%.