Europe Markets

European stocks close lower ahead of German election; Evergrande, central banks in focus

Key Points
  • The pan-European Stoxx 600 ended down 0.9% with all major bourses and most sectors in negative territory.
  • Traders are gearing up for German federal elections this weekend with early projections of the result set to arrive Sunday evening.
  • British food delivery firm Deliveroo shed around 5% after losing a deal with Shell's gas station convenience stores to rival Uber Eats.

LONDON — European stocks closed lower on Friday as investors reacted to central bank policy decisions and monitored developments surrounding China Evergrande Group.

The pan-European Stoxx 600 ended down 0.9% with all major bourses and most sectors in negative territory.

In Asia, stocks closed mixed Friday. Shares of China Evergrande Group in Hong Kong fell nearly 12%. The Wall Street Journal reported Thursday that Chinese authorities have told local officials to prepare for the potential demise of Evergrande. Uncertainty also remains around whether Evergrande will pay the interest that was due Thursday on a dollar-denominated bond.

In an exclusive interview on Thursday, European Central Bank President Christine Lagarde told CNBC she believes Europe's direct exposure to the embattled Chinese property company Evergrande would be "limited."

VIDEO3:4603:46
Europe's direct exposure to Evergrande crisis is limited: European Central Bank

In other news, the Bank of England on Thursday kept monetary policy unchanged and downgraded economic growth projections for the third quarter of this year. This came after the U.S. Federal Reserve indicated on Wednesday that it doesn't see an imminent rollback of the monetary stimulus that has been supporting the economy throughout the pandemic.

Sterling was down 0.3% against the dollar on Friday, trading at around $1.3675.

"If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Fed's post-meeting statement said, however. The central bank has been buying $120 billion a month of Treasurys and mortgage-backed securities since the start of the Covid crisis.

Stateside, the S&P 500 and Dow Jones Industrial Average were flat on Friday, wrapping up a volatile week on Wall Street.

Cryptocurrencies were also in focus for investors Friday, with bitcoin and ethereum slumping sharply after China's central bank vowed a harsh crackdown on the market.

Elsewhere, German business sentiment fell for the third consecutive month in September, a survey from the country's IFO Institute showed on Friday.

Traders will also be gearing up for German federal elections this weekend with early projections of the result set to come in on Sunday evening.

Stocks on the move

German software company Teamviewer was the best-performing stock on the Stoxx 600 Friday, climbing almost 5%.

AstraZeneca was also a top performer on the back of the news that the pharmaceutical giant had invested in the start-up behind Imperial College London's experimental Covid-19 vaccine. The deal will see both companies working together to develop and sell drugs based on the latter's self-amplifying RNA technology platform. Shares of AstraZeneca gained around 2%.

Parisian airport operator ADP gained nearly 3%, while airlines Tui and IAG both gained around 2%.

In the coming months, both the U.K. and the U.S. will relax pandemic-era travel rules for fully vaccinated people from several countries, including France.

At the other end of the blue chip index, British food delivery firm Deliveroo shed around 5% after losing a deal with Shell's gas station convenience stores to rival Uber Eats.

Shares of BP edged almost 1% higher after the oil giant said it would close some of its British gas stations due to truck driver shortages disrupting supply.

Enjoyed this article?
For exclusive stock picks, investment ideas and CNBC global livestream
Sign up for CNBC Pro
Start your free trial now