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Sept. 3, 2019, 7:42 a.m. EDT

Brexit uncertainty sweeps across Europe, sending stocks lower

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By Callum Keown


Getty Images
British Prime Minister Boris Johnson has threatened to call a general election if MPs block a no-deal Brexit

European stocks edged lower on Tuesday as Brexit uncertainty swept across the continent ahead of a crunch day for British MPs.

The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.66%  fell 0.4% ahead of the British Parliament’s Brexit showdown later in the day.

The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.33% dropped 0.3%, while the French CAC /zigman2/quotes/210597958/delayed FR:PX1 +1.18%   declined 0.5%.

The internationally focused FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.29% avoided the heavier losses, sliding just 0.1%, as sterling /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1946%  dropped below $1.20 to its lowest level since October 2016.

What’s moving the markets?

Brexit concerns have intensified, weighing on European stocks as the U.K. Parliament prepares for a crucial few days.

British Prime Minister Boris Johnson has threatened a snap election if a group of rebel MPs succeed in blocking a no-deal exit from the European Union through a bill being put forward on Tuesday.

The heightened uncertainty caused stocks to open lower and the prospect of an election led the pound to slide 0.7% to $1.1984.

Investors turned away from risky assets in favor of havens, as the yields on Italian and German 10-year bonds hit record lows.

Russ Mould, investment director at AJ Bell, said: “The market hates uncertainty and that extends to politics.

“The current chaos around the U.K. exiting the EU threatens to push down sterling even further unless we get a clear idea of what is happening and when.”

Positivity over a potential resolution to the U.S.-China trade war was tempered by reports that Beijing’s request to delay tariffs has been denied and that negotiators are struggling to schedule dates for a meeting this month.

Which stocks are active?

Travel and leisure stocks were hit on Tuesday as budget airline EasyJet /zigman2/quotes/202825892/delayed UK:EZJ +4.64% fell 4.5% after being downgraded by Kepler Cheuvreux from hold to reduce.

The Restaurant Group /zigman2/quotes/207518837/delayed UK:RTN -1.03%  dropped 11.5% after posting heavy losses in the wake of its takeover of Wagamama, the Asian-themed fast-food chain. The company swung to a pretax loss of £87.7 million in the first half of 2019, compared with a £12.2 million profit over the same period in the previous year.

British plumbing and heating distributor Ferguson /zigman2/quotes/209006722/delayed UK:FERG -0.34% rose 2.3% as it revealed plans to separate its U.K. operations and focus on its U.S. business.

/zigman2/quotes/210599654/delayed
XX : STOXX
461.70
+3.05 +0.66%
Volume: 0.00
July 28, 2021 5:50p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,570.36
+51.23 +0.33%
Volume: 56,569
July 28, 2021 6:30p
loading...
/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,609.31
+77.39 +1.18%
Volume: 55,290
July 28, 2021 6:05p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,016.63
+20.55 +0.29%
Volume: 574,478
July 28, 2021 4:49p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3903
+0.0027 +0.1946%
Volume: 0.0000
July 28, 2021 3:26p
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
888.80 p
+39.40 +4.64%
Volume: 2.99M
July 28, 2021 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£3.86 billion
Rev. per Employee
£214,929
loading...
/zigman2/quotes/207518837/delayed
UK : U.K.: London
115.60 p
-1.20 -1.03%
Volume: 808,716
July 28, 2021 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£892.69 million
Rev. per Employee
£33,013
loading...
/zigman2/quotes/209006722/delayed
UK : U.K.: London
10,130.00 p
-35.00 -0.34%
Volume: 263,312
July 28, 2021 4:35p
P/E Ratio
22.40
Dividend Yield
1.56%
Market Cap
£22.47 billion
Rev. per Employee
£503,690
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Callum Keown is a Barron's Group reporter for the Europe, Middle East and Africa region. He writes for MarketWatch, Barron’s, Penta and Financial News.

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