Europe ends under slight pressure as Carillion collapse weighs on sentiment; Metso drops 9.8%

Key Points
  • The pan-European STOXX 600 finished down 0.17 percent provisionally, while major sectors were mostly lower by the close. Major indexes closed in the red
  • Trade was lighter than usual Monday, as markets in the U.S. were closed for Martin Luther King, Jr. Day
  • Construction firm Carillion entered into liquidation, with the company's shares suspended from trading

Europe finished Monday's session slightly lower, amid a lighter trading day, as stocks paused for breath after two weeks of strong gains.

The pan-European STOXX 600 came off its lows, to finish provisionally down 0.17 percent, while major sectors were mostly lower by the market close.

The U.K.'s FTSE 100 slipped 0.12 percent, while France's CAC 40 dipped 0.13 percent and Germany's DAX fell 0.34 percent. In peripheral markets, Italy's FTSE MIB rose 0.49 percent.

Trade has been lighter than usual on Monday, as markets in the U.S. are closed, in light of Martin Luther King, Jr. Day. The dollar was under pressure, with the index down by 0.64 percent around Europe's close, against a basket of foreign currencies.

Carillion enters liquidation

One of the major news stories Monday was that U.K. construction firm Carillion had entered into liquidation. The company's shares were suspended from trading, but its rivals rose on the news, with Serco up over 7 percent and Interserve rising 2 percent.

U.K. banking stocks were consequently in focus as HSBC and RBS are seen as some of its top creditors. Both lenders ended trade in the red.

Elsewhere, utilities was the second top-performing sector. Endesa was a top performer, closing up 1.4 percent after Goldman Sachs raised its price target and rating on the stock.

In individual stock news, Finnish miner Metso dropped to the bottom of the European benchmark, tumbling 9.84 percent, after the firm reported lower-than-expected sales and profits.

Carillion collapse to have small impact on exposed banks: Analyst

On the other hand, Azimut soared 12.76 percent, after it announced that it was doubling its dividend. Vivendi was among the top performing stocks too, rising 2.7 percent following a rating upgrade, giving a boost to the media sector.

British engineer GKN popped more than 4 percent after suitor Melrose said it planned on meeting GKN shareholders, after the engineering firm rejected a multi-million acquisition proposal last week, Reuters reported.

Over the weekend, news emerged that BNP Paribas was making plans to benefit from the U.K.'s decision to leave the European Union. The French bank has prepared plans to attract mid-sized British companies, the Financial Times reported.

In Asia, stocks closed mostly higher but Chinese bonds and equities stumbled after the government announced new steps on banking oversight in an "arduous" fight on financial risks, Reuters reported.