Europe closes under pressure as Turkey's deepening economic crisis sparks contagion fears; Bayer tanks 10.3%

  • The U.K.'s FTSE 100 slipped 0.32 percent, while Germany's DAX fell 0.53 percent. France's CAC 40 however closed just touch below the flatline. Most peripheral indexes finished in the red.
  • Market focus is largely attuned to Turkey's financial woes, with the country's currency taking another slide to all-time lows of 7.2400 on Monday morning. The currency has since pared some of its losses.

European stocks failed to shrug off jitters by Monday's close, as Turkey's worsening economic crisis prompted investors to offload riskier equities and flee to safe-haven assets.

The pan-European Stoxx 600 finished the session down 0.25 percent provisionally, off its session lows.

The U.K.'s FTSE 100 slipped 0.32 percent, while Germany's DAX fell 0.53 percent. France's CAC 40 however closed just touch below the flatline. Most peripheral indexes finished in the red.

Symbol
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FTSE
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DAX
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CAC
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IBEX 35
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Looking at today's trade, sectors were mixed by the close, with technology and chemicals holding steady. Sectors turned somewhat higher in afternoon trade, following positive sentiment seen out of the U.S., but wavered by the close. Healthcare failed to close higher, with the sector being hit by a recent Roundup cancer ruling. On Friday, a U.S. court ruled that weedkiller Roundup had caused cancer in a groundskeeper and awarded him $298 million in damages.

The maker of Roundup, U.S. seed and chemicals group Monsanto, was deemed to have failed to warn the groundskeeper of the cancer risks posed by its weedkiller. Monsanto recently bought by Germany's Bayer and consequently the latter's shares tanked more than 13 percent during the morning session — hitting a near two-year low. Shares closed 10.3 percent down.

Another sector that saw red was travel and leisure, with Air France KLM leading the sectoral losses amid risks of further strikes. The airline's biggest pilots union said over the weekend that there were risks of further strikes if pay talks with management did not resume. Shares dropped 4.1 percent.

In the same sector, Ryanair popped 3 percent after German union Verdi announced that it would meet with the airline on Wednesday to start pay discussions for 1,000 cabin crew members, Reuters reported.

In earnings news, United Internet initially surged towards the top of the STOXX 600 on Monday morning, after reporting a rise in core profits over the second quarter. The web services group said it's considering taking part in next year's fifth generation mobile spectrum auctions. Despite a strong start, shares wavered in trade and closed a touch above the flatline.

Turkey troubles

Market focus has been largely attuned to Turkey's financial woes, with the country's currency taking another slide to all-time lows of 7.2400 early Monday. The lira briefly recovered some of its recent losses over the weekend, after Ankara's finance minister said the country had drafted an action plan to ease investor concerns and the banking watchdog announced it had limited swap transactions.

However, the lira tumbled again amid broader investor concerns over Turkish President Tayyip Erdogan's increasing control over the economy and the country's worsening relationship with the U.S. The lira has since pared some of its losses to trade at around 6.900 against the dollar just after European markets closed.

Turkey's troubles have sent jitters across markets worldwide, with Asian equities closing lower Monday while in the States, stocks were mixed around Europe's close. In Europe, the main sector feeling the brunt of Turkey's troubles was the banking sphere, which fell 1.18 percent.

Back in Europe, Britain and the European Union (EU) are reportedly scheduled to resume Brexit talks after a summer break. The U.K. is due to leave the EU on March 29, 2019; but negotiating teams are still hashing out the details of an accord that will allow them to keep frictionless trade.

Meanwhile, oil prices came under renewed pressure in afternoon trade as trade tensions and concerns over emerging markets dampened market sentiment and the outlook for fuel demand, Reuters reported.