European Markets Lower as UK Political Chaos Continues

Date: 21 October 2022 - 21:46

News ID: ۱۰۸۰۴۹

NEW YORK (CNBC) -
European markets were lower on Friday afternoon as political chaos in the UK continues following the resignation of Prime Minister Liz Truss. A leadership contest will now take place over the next week.
Meanwhile, EU leaders are still debating how to tackle the bloc’s energy crisis as they meet in Brussels, after Germany gave the green light for discussions around a price cap.
The Stoxx 600 was 1.5% lower shortly after midday, with all sectors and major bourses in negative territory. Retail stocks led the losses, down 4.1% for the session.
U.S. stock futures were down after a tumultuous day on Wall Street, with bond yields rising and a slew of wide-ranging corporate earnings. Futures for the Nasdaq 100, Dow Jones Industrial Average and S&P all slipped.
Shares in the Asia-Pacific mostly traded lower on Friday as investors weighed inflation data from several economies.
The British pound fell 1.3% against the dollar to $1.108 in early afternoon trading, more than wiping out moderate gains it made on Thursday as Prime Minister Liz Truss stepped down.
Sterling was trading at $1.1074 at 1:20 p.m. London time, its lowest level since Oct. 12.
“The pound has been susceptible to the broad strength in ‘king dollar’ today and reaffirms our view that what we saw yesterday — and even the prospects of a Rishi Sunak leadership – is not ‘game changing’ to GBP markets,” Viraj Patel, senior strategist at Vanda Research, told CNBC.
“Overseas investors are likely to see this political volatility as another reason to get out of U.K. assets.”
Adidas’ losses have deepened to 12% during afternoon deals, with Puma following closely behind with a 9% drop in share price.
Swedish telecoms company Telia, meanwhile, slumped 9%. The company lowered its outlook for 2022 and 2023 on reporting third-quarter earnings.
Sterling has fallen 1% to trade at $1.1127, losing gains made Thursday following the resignation of U.K. Prime Minister Liz Truss.
Public sector borrowing reached £20 billion ($22.2 billion) in the U.K. in September, up from £11.8 billion in August, according to the Office for National Statistics.
It is the second highest September borrowing figure since monthly records began in 1993.
The figure is £5.2 billion more than the £14.8 billion originally forecast by the ONS.
Retail leads losses in the European markets this morning, down 2.9%.
Britain’s retail sales figures were lower than expected, down 1.4% in September according to the Office for National Statistics.
The figure is 1.3% below pre-Covid levels in February 2020.
Germany’s DAX is seen opening around 119 points lower at 12,636, France’s CAC is set to drop by 51 points to 6,026 and Italy’s MIB index is expected to fall around 205 points at 21,398.