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European stocks end 1% down despite Wall Street recovery; E.ON sinks 15%

European stocks finished firmly in the red on Monday as investors failed to shake off concerns over a potential interest rate hike in September by the U.S. Federal Reserve.

The pan-European STOXX 600 ended 0.95 percent lower provisionally, having erased some of its losses after U.S. stocks posted mild gains on Monday.

The FTSE 100 slipped 1.12 percent, the French CAC finished down 1.15 percent and the German DAX fell 1.34 percent.

Traders have been closely following comments by Fed officials for clues on the timing of a rate hike in the U.S. Recently, Fed speakers have sounded more hawkish. On Monday, Atlanta Fed President Dennis Lockhart delivered a speech in which he said a "serious discussion" on raising rates was warranted at the central bank's upcoming meeting. Fed Governor Lael Brainard is scheduled to speak after the European market close on Monday.

On Friday, Boston Fed President Eric Rosengren said the U.S. economy had proven to be more resilient to exogenous risks and that "gradual tightening is likely to be appropriate."


Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC
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IBEX 35
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Oil comeback

Commodity stocks took a sharp tumble in the first half of Europe's trade, following a fall in the oil price and on the prospect that a U.S. rate hike would strengthen the U.S. dollar.

The STOXX 600's Basic Resources sector fell more than 3 percent in trade, before paring to end down 1.68 percent. Most metal prices were lower, however copper eked out some gains. Despite this, Anglo American, BHP Billiton and Glencore all closed sharply lower.

Energy stocks also closed lower despite oil prices recovering on the back of a softer U.S. dollar and stronger performance on Wall Street. Oil prices were initially down following an increased rig count in the U.S.. At the close, Brent hovered at $48.42, while U.S. WTI was at $46.35.

German stocks take center stage

In individual stock news, German utility E.ON fell 14.77 percent as Uniper, the power generation and energy trading business being spun off by the company, was due to start trading in Frankfurt.

Sticking with Germany, shares of Linde dropped 7 percent after merger talks with Praxair ended.

Primark owner AB Foods said on Monday that it was raising its full-year earnings outlook, yet shares tumbled, closing 10.8 percent down.

One standout stock on the STOXX 600 was lighting firm Osram. Shares of the German group rose 10.1 percent after Bloomberg reported that Siemens was considering selling its 17 percent stake of Osram Licht, citing unnamed sources.

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