Europe opens under pressure as post-Brexit rally cools

Europe opens under pressure as post-Brexit rally cools

European stocks came under pressure around Thursday’s open, as a rebound seen in U.K. stocks following the Brexit vote lost steam and a renewed decline in oil prices weighed on sentiment.

The pan-European STOXX 600 opened 0.5 percent down, with all sectors falling into negative territory.

London’s FTSE index was off 0.3 percent around the open, while the U.K.’s domestically focused FTSE 250 index was roughly flat. Meanwhile, the French CAC slipped 0.6 percent while the German DAXfell 0.4 percent.

Despite uncertainty over the U.K. and European Union’s future relationship after the country voted last week to leave the bloc, markets in the region rallied on Tuesday and Wednesday, with the FTSE 100 reclaiming all of its post Brexit losses on Wednesday.

Solid gains were also seen in Asia and the U.S., with the Dow closing up nearly 285 points in its best percentage gain since March 1.

On Thursday, Asia markets continued to trade higher tracking Wednesday’s global rally as markets recovered from their post-Brexit plunge.

The heads of 27 EU member states met on Wednesday without the U.K. to discuss the bloc’s next move following the referendum.

In a statement by Donald Tusk, President of the European Council, he said there was a “calm and serious discussion” about the consequences of the vote and reiterated that there would be no negotiations with the U.K on any future relationship until the country formally notified the EU of its intention to withdraw.

He also said that the U.K. could not “cherry-pick” in any future talks. “Leaders made it crystal clear today, access to the single market requires acceptance of all four freedoms, including the freedom of movement. There will be no single market a la carte,” he said in a statement.

Meanwhile, Scotland’s First Minister Nicola Sturgeon said on Wednesday she was given a “sympathetic” hearing in Brussels where she made her case for finding a way to keep Scotland in the EU, Reuters reported.

In other news, U.S. bank subsidiaries of Deutsche Bank and Santander have failed the U.S. Federal Reserve stress tests again with U.S. regulators flagging up “broad and substantial weaknesses” in their capital planning.

Elsewhere, Monsanto has asked Bayer to increase its takeover offer, reportedly demanding an extra $10 to $15 a share, according to unnamed sources cited by German business daily Handelsblatt. “Insiders” also told the paper that the mega merger between the two agro-chemical giants had been thrown into doubt by the Brexit vote.

On the data front, the U.K.’s June inflation rate and final first quarter GDP data is due on Thursday.



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