Markets in Europe drifted lower, led by German chemical company Bayer AG as a U.S. court judgement blamed Bayer’s weedkiller product Roundup for causing a case of cancer. Investors were anticipating developments including the U.S. Federal Reserve’s press conference Wednesday and shrugged off conflicting rumours on U.S.-China trade talks.
How did markets perform?
The STOXX 600 SXXP, -0.28% ended a five-day rally, falling 0.3% to 383.11 having risen 0.7% on Tuesday.
German equities led the declines in Europe, with the DAX DAX, +0.85% falling 0.94% from Tuesday’s close to 11680.7, giving back Tuesday’s gains of 0.85%.
Elsewhere the movement was more modest. France’s CAC 40 PX1, -0.05% was down 0.1% at 5,420.5 after leading Tuesday’s major European exchanges by rising 1%.
The U.K.’s FTSE 100 UKX, +0.04% was essentially flat at 7,321.7, having climbed 0.6% Tuesday. The pound GBPUSD, -0.3392% fell slightly, down 0.34% at $1.3222.
What’s driving the markets?
Aside from weakness in Germany, markets seemed broadly directionless in the absence of clarity on several fronts, including the Fed, trade and Brexit.
U.K. Prime Minister Theresa May will ask European leaders for a short extension to the Brexit deadline of March 29, following a reportedly shouty meeting of U.K. government cabinet ministers. Michel Barnier, the European Union’s chief Brexit negotiator, said the EU wants to hear concrete plans on how the U.K. plans to move forward; The Times indicated that this could take the form of a softer negotiating position, a second Brexit referendum or a general election.
After holding fire on rate hikes following market turbulence at year end, the Fed is expected to stand firm at the conclusion of its two day meeting. Fed watchers will be focused instead on indications of the pace of future policy tightening.
The Wall Street Journal reported that senior U.S. and China officials are due to meet shortly and that a trade deal could come as early as April. Bloomberg, however, said China could push back on fronts including tariffs and intellectual property, which could slow progress.
What stocks are active?
Shares in chemical producer Bayer AG BAYN, -12.38% fell 12.6%, crushed by the news that a U.S. court found that exposure to Bayer’s Roundup weedkiller product had caused a man’s cancer. The jury will now decide whether Bayer’s Monsanto unit will be held liable. The company also faces lawsuits from about 11,200 farmers, home gardeners and landscapers.
Home improvement retailer Kingfisher Plc KGF, -2.94% took a 3.8% hit following full-year earnings, showing pretax profit fell 53%. The company plans to nominate a successor to CEO Veronique Laury and is closing 19 stores in Germany, with more possibly to follow.
U.K. satellite services company Inmarsat Plc ISAT, +17.04% shot 16.9% higher on the announcement that it had received a takeover offer from a consortium including private equity firms Apax Partners and Warburg Pincus, as well as Canadian pension plan investors the Canada Pension Plan Investment Board, and the Ontario Teachers’ Pension Plan Board.
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