Reuters Insider - U.K. Day Ahead: Oil stocks lead FTSE 100 lower; Stoxx 600 on track for worst year in a decade

CPI SA

27/12/2018 16:52

Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_koeg07e1&referenceId=1_koeg07e1&pageId=ReutersNews
Source: Reuters Insider

Description: European stocks fall, with the Stoxx 600 heading for its worst
year since 2008. Meanwhile U.K. Defense Minister Gavin Williamson says he has
"grave concerns" about Huawei's bidding to supply the country with
telecommunications equipment.
Short Link: https://reut.rs/2LAvjiq

Video Transcript:

Well, good afternoon. I am Kimberley Lim. Welcome to your insight into Friday.
Let's take a look at how markets stand as we head in towards the close. If we
take a look there, we've got the FTSEurofirst 300 down around about 1.5%.
Shares are generally lower despite record bounce on Wall Street on Wednesday,
as worries persist about a slowing global economy. Now adding to the gloom was
data showing earnings at Chinese industrial firms dropped for the first time
in almost three years. The STOXX 600 is now on track for its worst year since
2008. Now, Sterling is clinging onto just above a three-day low, as investors
await another round of Brexit developments. A broadly weaker Dollar offered
some support to the struggling British currency. This morning, the Institute
of Directors said business confidence had sunk to an 18-month low. Companies
are growing increasingly pessimistic about the risk of a no-deal Brexit in a
little over three months' time now. Analysts say that until there's some
clarity on the situation, the UK economy will be going nowhere.
 
At the moment, the UK economy is paralyzed by Brexit uncertainty, both on
investment side as well as on consumption side. Everybody is waiting to see
what happens in January with the meaningful vote in the House of Commons or
whether there can be any kind of deal struck with the European Union. Until
that uncertainty is lifted, not much will happen. 

Now, the largest shareholder in Italy's Carige will meet officials at the
European Central Bank, after the family blocked a EUR400 million cash call
that was part of a rescue plan. Now, the Malacalza family controls 27.6% of
the Genoa-based bank. They blocked the cash call on Saturday, saying they
wanted more clarity on the bank's future business plans. The ECB has direct
oversight of Italy's 10th biggest bank, which has been struggling to shed bad
loans and boost capital. Shares in Carige are suspended but last traded at a
fraction of a penny. Now, the French infrastructure company Vinci says it
still has enough firepower after its purchase of a majority stake in Gatwick
Airport for further deals. One of its main ambitions is to grab a slice of
ADP, which owns Charles de Gaulle and Orly Airports in Paris. The French
government's 50.6% stake in ADP is worth roughly EUR9 billion. This morning,
Vinci announced it had bought a 50.01% stake in the London airport, despite
the shadow of Brexit and uncertainty over flying rights. Now, Britain's
Defense Secretary Gavin Williamson has reportedly expressed grave concerns
about China's Huawei. The Times quotes him as saying a closer examination is
needed before Huawei could participate in the upgrade of Britian's mobile
network. Reuters has exclusively reported that US President Donald Trump may
use an executive order to bar Huawei and Chinese rival ZTE from the United
States. Well, taking a look now at some economic data out to watch on Friday.
As you might expect for the last full trading day of the year, it will be
relatively quiet. In Spain, growth figures for the third quarter are due.
Economics forecast a rise of 2.5% over the same quarter last year. That would
also match the same figure in the second quarter, which was the slowest pace
since 2014. Inflation numbers also out from Spain are forecast to show a
slight slowdown. Over in Germany, CPI is expected to come in at 1.9%, down
from a revised 2.3%. That was above the ECB's inflation target and supports
the central bank's policy of rolling back its stimulus package. There are not
going to be any major corporate announcements out on the calendar. Well,
that's it for now. I'm Kimberley Lim, and this is Reuters