Markets

European stocks close slightly lower as caution returns ahead of Davos

Key Points
  • Policymakers and business leaders are gathering in Davos, Switzerland for the annual World Economic Forum conference.
  • The People's Bank of China kept its loan prime rate unchanged on Monday, sending Asian shares higher.

European markets closed slightly lower on Monday as policymakers and business leaders gather in Davos, Switzerland for the annual World Economic Forum (WEF) conference.

The pan-European Stoxx 600 closed down by 0.1%, with household goods falling 0.9% to lead losses while insurance stocks added 0.5%.

Climate change and sustainable business will be a key focus for delegates at this year's WEF summit, but other political risks such as international trade and geopolitical instability are also likely to be on the agenda.

Elsewhere, the People's Bank of China kept its loan prime rate unchanged on Monday, sending Asian shares higher. The decision came after President Donald Trump and Chinese Vice Premier Liu He signed a long-awaited "phase one" trade deal on Wednesday, easing tensions between the world's two largest economies.

Stocks on Wall Street reached record highs last week, rising on Friday on the back of positive economic data from both the U.S. and China. U.S. markets were closed on Monday for Martin Luther King Jr. Day.

Meanwhile, British Prime Minister Boris Johnson hosted a summit for 21 African leaders in London on Monday, in a bid to boost the U.K.'s trade ties with the continent ahead of the country's departure from the European Union.

Stocks on the move

Qiagen shares gained 4.9% after a report that the firm was in talks about a possible takeover, while French biotech company Biomerieux saw its shares climb 5% to lead the Stoxx 600.

At the other end of the European benchmark, Swiss travel retailer Dufry slid 4.5% while Air France KLM shares shed 4.6% after Davy Research cut the carrier's stock to "neutral" from "outperform."