European stocks edge lower
European markets moved into negative territory despite strong US job data
European stocks edged into negative territory on Monday afternoon, even as stronger-than-anticipated jobs data on Wall Street tempered expectations for a Federal Reserve rate cut.
The pan-European Stoxx 600 was 0.2% lower during afternoon deals, with most sectors and major bourses in the red.
Europe’s banking stocks led the losses, trading more than 1% lower after Deutsche Bank announced that it would pull out of its global equities sales and trading operations, scale back its investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability.
Germany’s flagship lender surged toward the top of the European benchmark shortly after the opening bell, before giving up all of its gains to slip toward the bottom of the index. Shares of Deutsche Bank were 6% lower during the afternoon session.
Meanwhile, Spain’s Enagas also tumbled to the bottom of the Stoxx 600 after a flurry of target price downgrades from RBC, J.P. Morgan and Kepler Cheuvreux. Shares of the utilities firm slipped nearly 6% on the news.
Global equities have generally been boosted by rising expectations that central banks will keep interest rates at or near record lows to boost economic growth.
Those expectations were tempered by a closely-watched U.S. labor report on Friday. Nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000, running contrary to worries that both the employment and overall growth picture was beginning to weaken.
However, stocks on Wall Street opened lower on Monday, as losses in Apple shares pressured the tech sector and investors braced for key testimony from the top Federal Reserve official later this week.
In currency markets, the Turkish lira weakened to its lowest level since late June after the country’s central bank governor, Murat Cetinkaya — whose four-year term was due to run until 2020 — was replaced by Murat Uysal.
The lira pared some of its losses to trade at around 5.7276 Monday afternoon.