LONDON: Europe’s major stock markets fell on Monday ahead of a busy week jam-packed with central bank interest rate decisions.
The London stock market, already beset with Brexit concerns, took an additional knock after British online fashion retailer ASOS issued a profits warning.
Frankfurt fell 0.5 percent and Paris slid 0.6 percent in early afternoon deals, while London was down 0.4 percent in midday trade.
The European single currency bobbed higher versus the dollar.
The US Federal Reserve will conclude its rate-setting policy meeting Wednesday and while expectations are for another hike in borrowing costs, comments from chairman Jerome Powell will be closely watched for an idea of its plans for 2019.
The Bank of England will follow suit on Thursday with its latest monetary policy decision.
The European Central Bank last week held interest rates steady as it ended its crisis-fighting economic stimulus known as quantitative easing (QE)
– Uncertainty reigns –
“European stocks are in the red and uncertainty reigns ahead of a week full of central bank decisions,” said IG analyst Joshua Mahony.
“Meanwhile, ASOS shares have plunged after a series of deep discounts failed to garner much in the way of additional demand.”
ASOS saw its share price collapse in London by about 40 percent as it warned over sales and profits after experiencing a “significant deterioration” in trade in the run-up to the key Christmas season.
The news sparked alarm among retailers already struggling with sales in their physical stores.
ASOS chief executive Nick Beighton said November had been the “most difficult month relative to expectations for five years” — as he blamed Brexit, weak consumer confidence and deep price discounting for the shock warning.
As a result, shares in British clothing group Next sank 3.9 percent while bellwether Marks & Spencer lost a similar amount.
Asian stock markets meanwhile mostly closed higher Monday as traders looked ahead to the Fed, and a Chinese economic policy-setting conference this week.
However, there is still caution on trading floors after Friday’s sharp sell-off fuelled by concerns over China’s economy, and despite a tweet from US President Donald Trump suggesting a trade deal could be hammered out between Washington and Beijing.
While there are signs the world’s top two economies are beginning to move towards a resolution in their bitter tariffs spat, there are increasing concerns about the global outlook following another dour set of indicators out of China.
A string of below-par readings this year have highlighted a slowdown in the Asian giant and observers are forecasting leaders will unveil fresh measures to pep up the economy, which is on course for another year of relatively weak growth.
The British pound remains somewhat bogged down as Prime Minister Theresa May struggles to win concessions from EU leaders over her Brexit agreement. —AFP