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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 +0.46%  fell 0.4% ahead of the British Parliament’s Brexit showdown later in the day.

The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.46% dropped 0.3%, while the French CAC /zigman2/quotes/210597958/delayed FR:PX1 +0.71%   declined 0.5%.

The internationally focused FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.20% avoided the heavier losses, sliding just 0.1%, as sterling /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1817%  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 -0.53% fell 4.5% after being downgraded by Kepler Cheuvreux from hold to reduce.

The Restaurant Group /zigman2/quotes/207518837/delayed UK:RTN +1.75%  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 +0.89% 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
471.88
+2.17 +0.46%
Volume: 0.00
Oct. 22, 2021 11:03p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,542.98
+70.42 +0.46%
Volume: 49,948
Oct. 22, 2021 6:30p
loading...
/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,733.69
+47.52 +0.71%
Volume: 65,949
Oct. 22, 2021 6:05p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,204.55
+14.25 +0.20%
Volume: 464,760
Oct. 22, 2021 4:57p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3783
+0.0025 +0.1817%
Volume: 0.0000
Oct. 24, 2021 11:44p
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
596.60 p
-3.20 -0.53%
Volume: 9.48M
Oct. 22, 2021 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£4.50 billion
Rev. per Employee
£214,929
loading...
/zigman2/quotes/207518837/delayed
UK : U.K.: London
87.00 p
+1.50 +1.75%
Volume: 4.51M
Oct. 22, 2021 4:35p
P/E Ratio
12.93
Dividend Yield
0.00%
Market Cap
£665.02 million
Rev. per Employee
£33,013
loading...
/zigman2/quotes/209006722/delayed
UK : U.K.: London
10,825.00 p
+95.00 +0.89%
Volume: 207,924
Oct. 22, 2021 4:35p
P/E Ratio
17.76
Dividend Yield
1.61%
Market Cap
£23.92 billion
Rev. per Employee
N/A
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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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