European stocks struggle amid Brexit fears and gloomy German data

Besides London stoxks, the euro also fell on recent developments. — Reuters pic
Besides London stoxks, the euro also fell on recent developments. — Reuters pic

LONDON, Feb 6 — Europe’s stock markets dipped lower today, as investors digested downbeat German economic data and fears continued over the looming threat of a no-deal Brexit.

Frankfurt dropped 0.3 per cent as official figures showed that industrial orders in Germany fell back in December, the latest sign of a slowdown in Europe’s largest economy.

The news also sent the European single currency down to US$1.138 (RM4.7)— the lowest level since 25.

London stocks meanwhile slipped by 0.1 per cent, with online supermarket Ocado hit by a warehouse fire, and lingering concerns over Britain leaving the European Union without a deal next month.



The odds of British Prime Minister Theresa May’s getting concessions from EU leaders tomorrow’s meeting in Brussels seemed to shrink further after comments by EU leader Donald Tusk.

He said there was a “special place in hell” waiting for those “who promoted Brexit without even a sketch of a plan how to carry it out safely”.

Japanese car giant Toyota weighed in on the issue after slashing its net profit forecast, saying there was no way to avoid a negative impact in the event of a no-deal Brexit.

German statistics office Destatis said the country’s orders were down by 1.6 per cent from the previous month.

“European are on the back foot after a surprise drop in German factory orders this morning added to signs that the region’s strongest economy is struggling,” Oanda analyst Dean Popplewell commented.

“The euro has fallen to its lowest level outright in a fortnight on the news.”

“December saw German factory orders decline at the fastest rate in six months, helping pile further misery on a eurozone which is clearly struggling amid global trade woes,” added IG analyst Joshua Mahony.

“With Brexit uncertainty and US-led trade friction, this decrease in factory orders highlights the weaker demand” often associated with significant upheaval and uncertainty.



Mercedes-Benz maker Daimler added to the bad news, reporting its worst year since 2015.

France’s CAC 40 market was down 0.1 per cent following French group BNP Paribas reporting a dip in profits.

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Wall Street opened slightly lower, a day after US President Donald Trump’s annual State of the Union address.

Trump touched upon a number of issues including the trade war, North Korea, the Russia investigation and healthcare.

US Treasury Secretary Steven Mnuchin said both sides in the US-China trade negotiations were working “around the clock” to reach an agreement by the March 1 deadline.

He also said the US economy is “still very strong”.

“The US economy continues to perform extremely well” amid signs of “a slowdown in Europe and other parts of the world,” he said.



In Asia, Tokyo and Sydney shares rose in another holiday-thinned trading day, with most of Asia off for the Lunar New Year. — AFP

Source: The Malay Mail Online





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