Europe close: No ho-ho-ho for stocks as investors say no-no-no
European markets finished in a decidedly unfestive mood on Monday as jittery investors kept a wary eye on US markets and the government shutdown impasse in Washington.
The Stoxx 600 index finished in the red as European bourses closed early. With most traders already on holiday, Germany and Italy shut for Christmas eve and thin trading volumes, the incentive to push into positive territory were about as appetising as a bowl of brussel sprouts on Boxing Day.
On Friday, US stocks tumbled amid worries about global economic growth and the temporary US government shutdown. The Dow slumped 1.8% like baubles falling off a dying Christmas tree to 22,445.37, the S&P 500 closed down 2.1% at 2,416.62 and the Nasdaq slid 3% to 6,332.99.
The mood was darkened by President Donald Trump’s acting chief of staff, Mick Mulvaney, who suggested the shutdown could continue right up to the opening of the next Congress on 3 January.
Trump and the Democrats remained at odds over funding for a border wall with Mexico.
Comments from White House trade adviser Peter Navarro also did little to help the tone, after he said the US might not reach a trade deal with China in the next three months unless Beijing can agree to a "profound overhaul" of its trade and industrial practices.
To cap off the sack full of joy being delivered from the US, Treasury Secretary Steve Mnuchin held calls with top US bankers over the weekend following the recent selloff in equity markets and convened a "Plunge Protection Team" last seen during the 2008 bank-inspired financial crash.
Mnuchin made a point of saying the banks were liquid, although there had been no suggestion that their cash ratios were an issue, prompting some commentators to wonder whether the Treasury Secretary had shot himself in the foot. Rumours about Trump asking whether he could fire Jerome Powell as chair of the Federal Reserve also circulated.
European shares have fallen almost 14% so far this year and set to record their worst performance since the 2008 financial crash caused by the banks.
Euronext shares fell after the pan-European exchange operator said it was buying the Oslo stock exchange for €625m ($711m).
Anglo American retreated despite raising its 2019 guidance for its Minas-Rio iron ore operation in Brazil after receiving regulatory approval relating to the Step 3 licence area. The mining giant said it now expected production to be 18m -20m tonnes (wet basis), from the previous guidance of 16m -19m.
Whitbread was on the front foot after saying late on Friday that the EU had cleared its sale of the Costa coffee chain to Coca-Cola and announcing a £500m share buyback.