By Carla Mozee, MarketWatch
Lanxess shares rally on M&A deal
European stocks slid Monday, with sharp losses for oil and gas
shares and German lender Deutsche Bank AG pushing the market's
benchmark to its biggest daily loss in 2 1/2 months.
The Stoxx Europe 600 dropped 1.6% to close at 340, marking its
largest one-day percentage decline since early July, according to
FactSet data. All sectors were lower, led by the financial , oil
and gas, and consumer services groups.
Regional indexes suffered, with Germany's DAX 30 down 2.2% to
10,393.71, for its biggest one day slump since June 27.
In Frankfurt, Deutsche Bank (DBK.XE) (DBK.XE) shares sank 7.5%
to an all-time closing low of EUR10.55 after Germany's Focus
magazine reported over the weekend that German Chancellor Angela
Merkel wouldn't support providing state aid for the country's
largest lender
(http://www.focus.de/magazin/kurzfassungen/focus-39-2016-kanzlerin-merkel-will-deutscher-bank-nicht-helfen_id_5977426.html).
The German government dismissed the report
(http://www.marketwatch.com/story/germany-dismisses-report-on-merkel-deutsche-bank-2016-09-26)on
Monday.
"Financial markets have started the new trading week in a
cautious mood with the prospect of the first [U.S.] presidential
debate and key developments in the oil market set to drive
sentiment," said Richard Perry, market analyst at Hantec Markets,
in a note.
Read: Clinton-Trump debate showdown carries potential to sock
stocks
(http://www.marketwatch.com/story/clinton-trump-debate-showdown-carries-potential-to-sock-stocks-2016-09-24)
Members of the Organization of the Petroleum Exporting Countries
and other major producers are meeting this week in Algiers
(http://www.marketwatch.com/story/algeria-oil-minister-sees-hurdles-to-opec-russia-output-deal-2016-09-26)
at the International Energy Forum. Investors will watch for any
news that oil-producing countries will agree to curb oil output as
the market deals with a long-running oil glut.
Investors have been questioning whether producers could actually
work out a deal, leading to volatility in oil prices
(http://www.marketwatch.com/story/oil-prices-attempt-a-rebound-as-hopes-rise-for-production-deal-2016-09-26)
recently.
Among European energy production companies, France's Total SA
(TOT)(TOT) fell 1.9%, Portugal's Galp Energia SGPS (GALP.LB) lost
1% and Spain's Repsol SA (REPYY) lost 1.2%. In the
oil-field-services and equipment group, Italy's Saipem SpA (SPM.MI)
gave up 4%.
The Stoxx Europe 600 Oil Index slumped 1.6%.
On Friday, Stoxx 600 fell by 0.7%
(http://www.marketwatch.com/story/european-stocks-pull-back-from-2-week-high-after-mixed-pmis-2016-09-23),
but still scored a weekly advance of 2.2%, the largest since
mid-July.
Deutsche pushes back: Deutsche Bank's head of communications
Joerg Eigendorf told CNBC on Monday
(http://www.cnbc.com/2016/09/26/deutsche-bank-denies-that-ceo-john-cryan-has-asked-merkel-for-support.html)
that Chief Executive John Cryan "at no moment of time" has asked
Merkel for support in its negotiations with the U.S. The Justice
Department this month proposed that the bank pay $14 billion to
settle civil claims
(http://www.marketwatch.com/story/deutsche-bank-rebuffs-14-billion-settlement-demand-in-us-mortgage-probe-2016-09-16)
related to mortgage-backed securities.
While the company's share price may be low, that's not the
bank's focus, he said. What's "really important to us is our credit
story, which is very strong. It's fundamentally strong."
Movers: Specialty chemical company Lanxess AG (LXS.XE) jumped
8.1% after saying Sunday it's buying Chemtura Corp
(http://www.marketwatch.com/story/lanxess-to-buy-chemtura-in-27-billion-chemical-company-merger-2016-09-25).
(CHMT) in a deal with an enterprise value of around 2.4 billion
euros ($2.7 billion).
UniCredit SpA (UCG.MI) was down 3.6% following a Reuters report
(http://www.reuters.com/article/us-eurozone-banks-italy-unicredit-idUSKCN11W1J9)
the Italian lender is aiming to raise between EUR15 billion to
EUR16 billion through the sale of shares and assets.
Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) shares dropped 3.1%
following a ratings downgrade to sell from neutral at Goldman
Sachs.
Data: The Ifo German business sentiment index rose in September
(http://www.marketwatch.com/story/german-business-sentiment-rebounds-sharply-ifo-2016-09-26),
hitting its highest level since May 2014.
The euro extended gains after the report, buying $1.1273, up
from $1.1224 late Friday.
The euro also moved firmly higher against the pound
(http://www.marketwatch.com/story/pound-fall-to-5-week-low-against-euro-as-hard-brexit-fears-intensify-2016-09-26)
heightened fears that the U.K. government is heading for a
so-called hard Brexit that would take the country off the single
market. Sterling slumped to a five-week low against the shared
currency at an intraday low of EUR1.1472.
Elsewhere, European Central Bank President Mario Draghi said
Monday afternoon at the European Parliament that the low
interest-rate environment carries risks for the region that need to
be closely monitored. As well, there has been less momentum in
recovery in the euro-area, he said.
Indexes: France's CAC 40 fell 1.8% to 4,407.85 and Italy's FTSE
MIB declined 1.6% to 16,192.48. The U.K's FTSE 100 fell 1.3% to
6,818.04
(http://www.marketwatch.com/story/ftse-100-slumps-more-than-1-with-oil-shares-in-the-red-2016-09-26).
Spain's IBEX 30 lost 1.3% to 8,711.40. Read:Spain's regional
elections a boost for acting Prime Minister Mariano Rajoy
(http://www.marketwatch.com/story/spains-regional-elections-a-boost-for-acting-prime-minister-mariano-rajoy-2016-09-26)
U.S. debate: Turning back to politics, the first U.S.
presidential debate between Democratic nominee Hillary Clinton and
Republican nominee Donald Trump will begin at 9 p.m. Eastern Time,
or 2 a.m. London time Tuesday morning.
"With the September FOMC meeting out of the way traders will
turn focus towards who will be the next [U.S.] president. With the
candidates seemingly running on equal footing in the polls, the
live debates could be the swing factor as to whether Trump or
Clinton claim the White House," said Hantec Market's Perry.
"So these debates will be volatility factors for traders and the
first is in New York tonight."
(END) Dow Jones Newswires
September 26, 2016 12:07 ET (16:07 GMT)
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