Investing.com — European stock markets fell Monday as traders digested regional activity data amid political unrest ahead of the Federal Reserve’s final policy meeting of the year.
At 11:45 ET (16:45 GMT), Germany’s fell 0.25%, Britain’s fell 0.5% and France’s fell 0.7%.
European stock markets have fallen at the start of the new week, with investors on edge ahead of the final policy-setting meeting later in the week.
The US central bank is widely expected to cut interest rates again on Wednesday, which will help boost economic activity in the world’s largest economy but could also signal a pause in the rate-cutting cycle in January.
There are also policy meetings this week of the , and the
Business activity in the eurozone is improving
Data released earlier Monday showed economic activity in the euro zone fell this month.
The HCOB’s preliminary composite Purchasing Managers’ Index for the eurozone, compiled by S&P Global, rose to 49.5 in December from 48.3 in November, as the bloc’s dominant services sector returned to growth and a prolonged contraction in manufacturing industry compensated.
However, this still remained below 50 degrees between growth and shrinkage.
Germany’s Scholz loses confidence vote
German Chancellor Olaf Scholz has lost a vote of confidence in parliament, paving the way for early elections in February after the fall of his government.
Scholz is expected to ask President Frank-Walter Steinmeier to dissolve parliament and formally call new elections, tentatively scheduled for February 23.
France is underperforming after the downgrade of its credit rating by Moody’s
Credit rating agency Moody’s (NYSE:) unexpectedly downgraded France’s rating from ‘Aa2’ to ‘Aa3’ on Friday, with a stable outlook for future moves.
The news came hours after President Emmanuel Macron appointed veteran centrist politician François Bayrou as his fourth prime minister this year.
Sharp (OTC:) decline in British business confidence
A new survey from Make UK and BDO shows that business confidence among British manufacturers has fallen to the lowest level in a year, due to rising costs.
While production and orders remain stable and companies continue with hiring and investment plans, sentiment has deteriorated significantly since the third quarter.
In the third quarter, 58% of manufacturers expressed optimism about the economic outlook, a stark contrast to the current report.
Now, 70% of manufacturers have reported cost increases of up to 20% in the past year, while 8% saw cost increases of up to 50%.
Vivendi (OTC:) soared after the conglomerate was split up
In the corporate world, Canal+ shares fell on their debut in London on Monday, while fellow Vivendi (EPA:) spinoffs Havas and Louis Hachette rose in Amsterdam and Paris, after shareholders of the French media conglomerate voted to break up the French conglomerate .
Vivendi shares rose more than 40%.
Porsche (ETR:) Shares fell 2.4% after the company withdrew its full-year 2024 earnings guidance after identifying an expected impairment loss on its investments.
Shares of Entain (LON:) fell more than 6% due to alleged systemic breaches of Australia’s anti-money laundering and anti-terrorist financing laws.
Oil prices are going lower
Oil prices fell slightly on Monday, driven by cautious market sentiment ahead of the Federal Reserve meeting and renewed scrutiny of Chinese economic data for insight into energy demand.
At 11:45 AM ET, February futures prices were down 0.9% at $73.40 per barrel, while West Texas Intermediate (WTI) crude fell 1.6% to $70.21 per barrel.
Both contracts posted huge gains last week, buoyed by new European Union sanctions on Russian oil and expectations of tougher sanctions on Iranian oil supplies.
However, concerns about sluggish demand have limited profits, especially from China, the world’s largest crude oil importer.
(Navamya Acharya contributed to his article.)
