Brexit drags European markets lower; Bayer shares tumble; Sterling slips

  • The pan-European Stoxx 600 was down around 0.8 percent during trade, with most sectors and major bourses in negative territory.
  • Inmarsat surged to the top of the index after the satellite operator announced it had opened talks about a $3.3 billion cash takeover approach from a private equity-led consortium.
  • Sterling slipped after British Prime Minister Theresa May formally requested a Brexit delay.

European stocks were lower on Wednesday, as investors awaited a policy decision by the U.S. Federal Reserve and the U.K. officially requested a delay to its departure from the EU.

The pan-European Stoxx 600 closed provisionally down 0.78 percent during Wednesday trade, with all sectors and major bourses in negative territory.

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Europe's autos stocks led the losses, down almost 2.3 percent, amid media reports of U.S. concerns that China is pushing back against American demands in trade talks.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin both plan to travel to Beijing next week for another round of negotiations with Chinese Vice Premier Liu He, the Wall Street Journal reported on Tuesday, citing unnamed Trump administration officials.

The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods over the past year, battering financial markets and souring business and consumer sentiment.

Looking at individual stocks, Germany's Bayer tumbled to the bottom of the European benchmark after a second U.S. jury found the company's Roundup weed killer was a "substantial factor" in causing a man's cancer. Shares of the pharmaceutical group fell more than 9 percent on the news.

Sticking with Germany, shares of BMW slipped almost 5 percent. It comes after the Munich-based car maker announced it expects pretax profit to fall by over 10 percent in 2019. BMW also launched a sweeping 12 billion euro ($13.6 billion) cost savings and efficiency plan to help offset higher tech investment and currency costs.

Inmarsat surged to the top of the index after the satellite operator announced it had opened talks about a $3.3 billion cash takeover approach from a private equity-led consortium. Shares of the London-listed stock rose more than 13 percent.

Official data published Wednesday showed Britain's main inflation rate ticked up in February, but stayed close to January's two-year low. Consumer prices rose at 1.9 percent in February, after a 1.8 percent increase in January.

Meanwhile, London house prices fell by an annual rate of 1.6 percent in January, amid heightened Brexit uncertainty.

Brexit set to be delayed

The U.S. central bank is widely expected to keep rates steady later in the session, with investors monitoring a decision on the Fed's rate projections for the next few years.

Back in Europe, British Prime Minister Theresa May formally requested a delay to Brexit, 1,000 days after the U.K. narrowly voted to leave the European Union. In a letter to EU leaders, May asked for the U.K.'s departure from the bloc – currently scheduled for March 29 – to be pushed back to June 30.

Sterling plummeted on the back of the news, losing nearly 1 percent against the dollar, while the FTSE 100 edged slightly lower.

May's request for an extension was accepted by Brussels but on condition that the U.K Parliament first accepted the provisional withdrawal deal struck between London and Brussels.