Europe Markets

European stocks close 1.1 percent lower amid Brexit resignations; sterling tumbles

Key Points
  • On Wednesday, British Prime Minister Theresa May said she had obtained enough support for her proposed Brexit deal to move forward.
  • During Thursday's trade, a number of senior government employees quit their roles.
  • Theresa May announced a press conference to take place at 5.00 p.m. London time.
An anti-Brexit demonstrator hold placards opposite the Houses of Parliament, in London, Britain, November 13, 2018.
Simon Dawson | Reuters

European stock indexes slipped on Thursday after U.K. Brexit minister Dominic Raab resigned from his post, piling yet more pressure on U.K. Prime Minister Theresa May.

The pan-European Stoxx 600 ended provisionally down 1.11 percent, with all major indexes in the red amid the plunge for the pound.

Raab, in a letter to the U.K leader, said he could not reconcile with the terms of her proposed Brexit deal, after the promises the ruling Conservative Party made to the country in an election manifesto last year. By late-afternoon, sterling had plunged 1.82 percent on the news to trade at $1.2746 levels — on course for it worst day versus the dollar since October 2016.

Theresa May announced a press conference to take place at 5.00 p.m. London time.

U.K. financial stocks slumped on the news of Raab's resignation. RBS down 9.6 percent - it's worst day since the Brexit vote in June 2016. Lloyds slipped 5.03 percent and Barclays down 4.26 percent.

U.K. house builder stocks also extended losses with Barratt Developments down 7.48 percent, Taylor Wimpey down 7.59 percent and Persimmon down 7.57 percent.

US-China trade talks

Aside from Brexit, stocks in Asia saw market sentiment improve on reports that China has delivered a written response to U.S. trade demands. U.S. government sources told Reuters on Wednesday that China had sent a response to U.S. demands on the ongoing trade negotiation, giving hopes to investors that the two sides might bring an end to the spat.

Concerns over an oversupply in oil markets continues to dominate investor sentiment. On Thursday, oil prices slipped amid fears of rising supply and slow consumption. Front-month Brent crude oil futures were trading at $65.88 per barrel, down 24 cents, or 0.4 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $55.96 a barrel, down 29 cents, or 0.5 percent.

In the United States, The Dow Jones Industrial Average fell more than 100 points at the open as Amazon and Walmart led the slide.

The broader S&P 500 fell 0.4 percent shortly after the bell as energy and utilities shed more than 1 percent each. The tech-heavy Nasdaq Composite traded flat as Amazon dropped 1.3 percent and Facebook fell 0.8 percent.