European stocks close flat as Brexit talks hang in the balance

Key Points
  • Brexit negotiations continued Wednesday as U.K. Prime Minister Boris Johnson seeks to hammer out a deal with the bloc ahead of a meeting of European leaders this week.

European stocks traded without any real direction Wednesday as investors pause for guidance on the likelihood of an imminent Brexit deal between the U.K. and the EU.

The pan-European Stoxx 600 slightly pared early losses to end the session just 0.05% below the flatline, with financial services falling 0.9% to lead losses while auto stocks climbed 1.6%.

Brexit negotiations hit a wall on Wednesday, the last day of talks before a crucial EU summit. Reports Tuesday night had indicated that a draft deal may be presented Wednesday, but further British media reports Wednesday cited EU diplomats as claiming talks had stalled over a future trade deal and fair competition clauses.

Irish Prime Minister Leo Varadkar confirmed that disagreements surrounding Northern Ireland's relationship with the bloc had "yet to be resolved."

A spokesperson for U.K. leader Boris johnson said late Wednesday that Johnson would attend the EU summit next week and that there remained a chance of securing a deal.  

Meanwhile, tensions between the world's largest economies heated up once again overnight as China threatened countermeasures to a U.S. bill supporting protests in Hong Kong.

Embattled Hong Kong Chief Executive Carrie Lam on Wednesday ruled out yielding to the demands of pro-democracy protesters as violence escalates across the city. Lawmakers disrupted Lam's annual policy address on Wednesday, heckling and throwing objects at her.

On the data front, U.K. consumer price index (CPI) inflation for September roughly matched analyst expectations to grow 1.7% year-on-year, while euro zone CPI rose 0.4% on the month and 0.8% on the year. Italy saw its EU-harmonized inflation rise 1.4% month-on-month in September.

Stocks on the move

Shares of Norwegian seafood company Mowi jumped over 5% to lead the Stoxx 600.

At the bottom of the European blue-chip index, Eurofins Scient shed more than 8.3%.

Britain's BBA Aviation slipped 5.2% while Hammerson shares traded 3.7% down after RBC downgraded the stock.