LONDON – European markets retreated Tuesday, pulling back from Monday’s rally with Brexit talks and the first U.S. presidential debate on investors’ radar.
The pan-European Stoxx 600 was down 0.3% by afternoon trade, slightly paring its earlier losses. Banks shed 1.5% while utilities bucked the broad downward trend to add 0.8%.
The cautious session follows mixed trading in Asia-Pacific overnight, where mainland Chinese and South Korean shares advanced while stocks in Hong Kong and Australia retreated slightly.
Stateside, stock futures for Tuesday are slightly lower following a rally on Monday, as investors prepare for the first presidential debate between President Donald Trump and Democratic challenger Joe Biden, with a clear victory for either party likely to cause some market movement.
Markets are still cognizant of the continuing spread of the coronavirus worldwide, with the global death toll now exceeding 1 million with more than 33 million confirmed cases, according to data compiled by Johns Hopkins University.
Investors will also have an eye on progress toward a fresh fiscal stimulus package in the U.S., with House Speaker Nancy Pelosi announcing on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package, smaller than initially proposed but still well above what Republican leaders have offered.
Back in Europe, the U.K. and the European Union have indicated that a Brexit deal is still some way off after negotiations recommenced Monday over implementing their Withdrawal Agreement, which British Prime Minister Boris Johnson’s government has sought to renege on.
In corporate news, the bitter fallout from LVMH‘s soured $16 billion acquisition of Tiffany continues, with the Louis Vuitton owner countersuing the U.S. jeweler on Monday and arguing that Tiffany’s financial management during the coronavirus crisis nullifies the purchase agreement.
On the data front, final euro zone economic sentiment rose to 91.1 in September from 87.5 in August, European Commission figures showed Tuesday, while sentiment in the U.K. rose to 83.0 from 75.1.
In terms of individual share price action, British plumbing and heating distributor Ferguson climbed 6.8% by the afternoon after restoring its dividend as cost cuts helped the company boost full-year profits.
At the bottom of the European blue-chip index, Network International and Natixis shares both fell 3.9%.
