European markets close lower amid political uncertainty; Zalando shares drop over 8%
- Sterling goes on a wild ride as trader sentiment flip flops on Brexit.
- In the retail world, earnings were at the fore. WM Morrison fell 4.5 percent after reporting lower sales growth in the last quarter.
- Shoe retailer Zalando registered its slowest sales rate since it was launched 10 years ago.
Stocks in Europe turned lower on Tuesday as investors tried to navigate through different sources of political uncertainty.
European markets
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| .FTSE | FTSE 100 | 8,139.83 | +60.97 | +0.75% |
| .GDAXI | DAX | 18,161.01 | +243.73 | +1.36% |
| .FCHI | CAC 40 Index | 8,088.24 | +71.59 | +0.89% |
| .FTMIB | FTSE MIB | 34,249.77 | +310.02 | +0.91% |
| .IBEX | IBEX 35 Idx | 11,154.60 | +170.90 | +1.56% |
By mid-afternoon, the pan-European Stoxx 600 closed provisionally 0.2 percent lower with most sectors struggling to make gains. Retail, Basic Resources, and Telecoms were among the worst performers.
In the retail world, earnings were at the fore. WM Morrison fell 4.5 percent after reporting lower sales growth in the last quarter. The Berlin-based fashion retailer Zalando registered its slowest sales rate since it was launched 10 years ago. Shares dropped 8.4 percent as a result.
The FTSE 250 gambling company, William Hill, also had a bad day despite claiming it was set to double profits by 2023. Analysts cite long term gains from a liberalizing of the US. market but also noted falling trade at U.K. high street locations and new rules on betting machines.
Swiss recruitment firm Adecco and German postal firm Deutsche Post made their way into the best performing stocks Tuesday morning after reporting third-quarter results.
In currency markets, sterling was under pressure after a U.K. lawmaker said it looked like Britain was heading towards a no-deal Brexit.
The pound's fortunes then quickly flipped around after a cabinet meeting chaired by U.K. Prime Minister Theresa May wrapped up offering some positive mood music on the plan to ensure some form of withdrawal deal is struck with the European Union.
That rising sterling put downward pressure on the FTSE 100 which closed provisionally lower by 0.86 percent.
Meanwhile, euro zone finance ministers continue to put pressure on Italy to submit a new budget to the European Commission and end the current standoff over the country's spending plans. Italy's finance minister told CNBC on Tuesday morning that he will continue the dialogue with the EU over the new spending plans.
Investors across the globe are watching U.S. voters head to the polls in the midterm elections scheduled for Tuesday, which could send ripples throughout capital markets.
Markets opened positively in the United States.
On the data front, euro zone business growth slowed in October, hitting a two-year low. The IHS Markit euro zone composite final purchasing managers' index stood at 53.1 in October from 54.1 in the previous month.