European stocks traded sharply lower on Monday morning as weakness seen in markets overseas weighs on sentiment.
The pan-European Stoxx 600 was more than 1 percent lower with every sector trading in negative territory.
Global markets fell across the board after the Dow Jones industrial average tumbled 665.75 points to close down at 25,520.96 on Friday, capping off the index’s sixth-largest points decline ever.
Technology stocks were the most affected sector by the global sentiment and fell 1.4 percent in early deals. Furthermore looking across the European benchmark, there were very few stocks moving up. Kingfisher was at the top of the index up by 1 percent.
Earnings, new data and politics were also affecting sentiment in European trading.
In earnings news on Monday, Ryanair posted a 12 percent increase in profits during the last quarter, but the stock was down by more than 2 percent in early deals. The airline said that it would face down what it described as “laughable demands” by pilots for conditions traditionally offered by high-cost rivals, Reuters reported.
The Swedish engineering group Sandvik announced better-than-expected core profits for its fourth quarter. The shares were off by 0.4 percent.
On the data front, Spanish services purchasing managers index (PMI) hit 56.9 in January, registering its fastest expansion in the six months to January.
Meanwhile in the political space, coalition negotiations between German Chancellor Angela Merkel’s conservatives and the Social Democrats (SPD) broke down over the weekend, failing to meet a Sunday deadline.
SPD members stated that progress had been made and that the two groups would resume talks on Monday, however, Reuters reported. Investors will now look ahead for any news as to whether an agreement can be made, however the country’s index remained under pressure ahead of the open.
Speaking of negotiations, investors will paying attention to the latest news surrounding Brexit, as a new round of talks between the U.K. and European Union (EU) kick off on Tuesday. Ahead of the discussions, British Home Secretary Amber Rudd told the BBC on Sunday that the U.K. government wouldn’t “surrender too quickly” in its battle for a bespoke trade deal with the EU.
