European stocks close lower as fresh US-China trade tariffs kick in; Sky jumps 8.6% on Comcast deal

Key Points
  • The latest round of tariffs targeting U.S. and Chinese goods went into effect Monday.
  • Comcast won the auction for a takeover of U.K. broadcaster Sky on Saturday, submitting a much higher bid than Twenty-First Century Fox.
  • The U.K. government has denied reports that it was planning to call a new snap election in November.

European stocks finished lower on Monday, as investors braced for the ramifications of another round of tariffs from the two major economies.

The pan-European Stoxx 600 ended provisionally down by 0.54 percent with almost every sector in the red. Autos were the worst performers following renewed uncertainty over U.S.-China trade relations. Monday marks the day when the latest round of tariffs — which target products from both the U.S. and China — come into effect.

BMW and a number of other German automakers also lost value after representatives of auto companies failed to reach a compromise with the German government on the retrofitting of diesel vehicles. German Chancellor Angela Merkel on Monday said she would finalize a decision on diesel car retrofits on October 1. Volkswagen fell 0.88 percent, Daimler dropped 2.6 percent and BMW dropped 2.51 percent.

Elsewhere across European stocks, Sky led the day's gains up by 8.6 percent. This followed news that the U.K. broadcaster recommended its shareholders accept an offer from Comcast for a $40 billion takeover. "As the price of the Comcast Offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast Offer," the company said.

Shares of Randgold Resources also rose more than 6 percent after the company agreed to merge with Canadian Barrick Gold, in a deal worth $18.3 billion.

Airlines were struggling to make gains after Thomas Cook announced a profit warning. The FTSE 250 company was down almost 27 percent. Tui dropped 4 percent and Ryanair was down by about 2 percent.

On Wall Street, stocks opened lower, on the back of the intensifying trade dispute between the U.S. and China. Beijing reportedly cancelled trade talks with Washington as the new round of levies took effect.

New snap election?

Meanwhile, the U.K.'s relationship with the European Union remains tense between both groups and within the British political party system itself. In the latest, the British opposition Labour party saw its leader Jeremy Corbyn state that he would support a second Brexit referendum vote if his party decided to pursue this move.

At the same time, the U.K. government has denied reports over the weekend that it was planning to call a new snap election in November. The move would be an attempt to increase support for the Prime Minister and her efforts to reach a Brexit deal with Europe.

In oil news, Saudi Arabia's oil minister rebuffed President Donald Trump's recent accusations that OPEC was trying to push crude prices higher, when speaking to journalists Sunday at the Joint Ministerial Monitoring Committee (JMMC) in Algiers.

Brent crude topped the $81 mark on Monday as the market tightened and traders looked ahead to the implementation of a second round of U.S. sanctions on Iran, scheduled to take effect in early November.

In economic data, the Ifo Business Climate Index showed a slight slippage in September, as companies became lowered the outlooks for their business. Nonetheless, Ifo said that the Germany economy continues robust.