European Market Open: Indices to open lower as Brexit talks rumble on

A spokesman for Number 10 said ‘very large gaps remain’ while von der Leyen said the two sides were still ‘far apart’.

Brexit 5

Brexit talks to resume until Sunday as European summit kicks off

UK prime minister Boris Johnson and European Commission president Ursala von der Leyen failed to break the Brexit deadlock in Brussels last night, with reports suggesting the pair are giving negotiators until Sunday to hash out a last-minute breakthrough. A spokesman for Number 10 said ‘very large gaps remain’ while von der Leyen said the two sides were still ‘far apart’.

That means talks will continue as the last European Council summit of 2020 starts today, with EU leaders meeting in Brussels for a two-day event. Officially, the response to COVID-19, climate change and EU-US relations are at the top of the agenda – but Brexit is likely to feature considering how little time is left before the December 31 deadline. Some reports suggest EU member states could be presented with the EU’s no-deal contingency plans.

ECB expected to maintain rates but introduce new stimulus

The ECB will reveal its interest rate decision at 1245 GMT before holding a press conference at 1330 GMT. The central bank is not expected to change interest rates, but other forms of stimulus – such as more bond purchases and liquidity for banks – are set to be introduced. How to handle the economic shocks that could be caused by COVID-19, a hard-Brexit and a dispute over the EU’s recovery fund are all on the table today.

The event will bring the euro into play, with the likes of EUR/USD under the spotlight.

FTSE 100 to open lower

The FTSE 100 is set to open slightly lower this morning at 6577.6 from 6580.4 at Wednesday’s close. The UK’s blue-chip index closed 0.1% higher on Wednesday, having briefly touched its highest level since early March.

European indices to follow UK stock lower

The Euro STOXX Index is called to open 0.3% lower at 3525.5 from 3530.7 at the close yesterday.

Germany’s DAX is set to open 0.3% lower at 13314.5 from 13342.3 at the last close. The index closed more than 1% higher on Wednesday.

Meanwhile, France’s CAC 40 is to open down 0.1% at 5545.5 from 5552.8 yesterday, when it closed down 0.4%.

Find out more about trading indices here.

Top stock news

The top news from European stocks this morning is:

EU considers fines for large tech firms that break the rules

The FT reported that the EU will require ‘very large’ tech stocks like Facebook and Amazon to take greater responsibility for policing the internet or face fines of up to 6% of their global revenue.

The news builds pressure on big US tech firms. Overnight, US federal regulators and more than 45 state prosecutors filed a lawsuit against Facebook that hopes to get courts to consider forcing the break-up of the social media giant by making it offload Instagram and Whatsapp.

London Stock Exchange eyes approval for Refinitiv deal

London Stock Exchange Group said it has received more approvals for its $27 billion deal to buy Refinitiv and that it expects to have all clearances in place to be able to complete the purchase by the end of the first quarter of 2021.

TUI sinks to loss as COVID-19 and expects long recovery

Travel giant TUI revealed the severe impact COVID-19 has had on the travel industry as the airline, cruise and hotel operator posted a 58% plunge in revenue in the year to the end of September. The stock slipped to a loss of over EUR3 billion compared to a EUR532 million profit the year before. TUI said it does not expect to return to profitable growth until the 2022 financial year.

Ocado reports 35% rise in retail sales

The online supermarket joint venture owned by Ocado and Marks & Spencer has announced sales grew by 35% in the fourth quarter of its financial year, while average orders per week has increased 3% to 360,000. The venture expects annual Earnings before interest, tax, depreciation and amortisation to be ‘over’ £70 million.

DS Smith resumes dividend

Paper and packaging firm DS Smith said revenue fell 9% in the half-year to the end of October while pretax profit plunged by more than half. However, free cashflow grew 16% and the firm said it will restart paying dividends with a 4.0p per share interim payout.

AVEVA Group sees solid uptake for rights issue

AVEVA Group said 99.1% of shares offered under a 7-for-9 rights issue launched in November and priced at 2255 pence per share have been taken up by shareholders. The offer will raise around £2.8 billion and help part-fund the acquisition of rival OSIsoft. 

Frasers Group sales fall but profit increases

Frasers Group, the owner of Sports Direct and other high street brands, said revenue fell 7.4% in the first half of its financial year, but said pretax profit jumped over 17% to £106.1 million.

Siltronic agrees to EUR3.75 billion takeover by GlobalWafers

German outfit Siltronic said it has agreed to be taken over by Taiwanese peer GlobalWafers for EUR3.75 billion to combine two of the world’s largest silicon wafer makers. The deal is worth EUR125 per share to Siltronic shareholders, which will have to approve the deal.

Forex: Japanese yen strengthens against euro and dollar

The most drastic movements in the currency markets this morning, according to data from Reuters, are as follows:

FX Pair Price Net Change
EUR/JPY 126.28 0.37%
USD/JPY 104.44 0.23%
GBP/JPY 139.49 -0.19%
USD/BRL 5.1708 0.05%
USD/INR 73.6725 -0.04%

Commodities: Oil prices hold steady as gold takes another fall

Brent trades at $49.01 this morning, broadly flat compared to $49.03 at the close yesterday, while WTI is at $45.78 versus $45.74.  

Oil prices climbed to their highest level since early March last week but have failed to move beyond that this week. Recent data from the US has fuelled concerns over demand while the EIA said oil output will decline more than previously thought this year.

Find out more about trading the volatility in oil here.

Gold trades at $1836.8, down from $1839.7 at yesterday’s close as the safe-haven continues to edge lower after hitting a two-week high on Monday.

Find out how to trade gold and other precious metals here.

Market-moving events in the economic calendar

The headline event in a busy day for economic calendar is the ECB interest rate decision at 1245 GMT and the press conference at 1330 GMT, with the latter coinciding with the release of US CPI and jobless claims data.

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.

Time (GMT)

Country

Event

1100

UK

NIESR GDP Estimate (3M) for Nov

1245

Eurozone

ECB Interest Rate Decision

1330

Eurozone

ECB Monetary Policy Statement and Press Conference

1330

US

Consumer Price Index

1330

US

Continuing Jobless Claims (Nov 27)

1330

US

Initial Jobless Claims (Dec 4)

1330

US

Consumer Price Index Ex Food & Energy (Nov)

1330

US

Consumer Price Index

1900

US

Monthly Budget Statement (Nov)

2000

New Zealand

REINZ House Price Index (Nov)

2130

New Zealand

Business NZ PMI (Nov)



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