London - European shares were dragged
lower by miners and carmakers on Tuesday, as markets awaited
details of Britain's Brexit position in a late morning speech by
Prime Minister Theresa May.
The pan-European STOXX index was down 0.4 percent,
and Britain's blue-chip FTSE extended its losses, down
0.3 percent.
Uncertainty about Britain heading for a "hard" Brexit was
reinforced over the past week, pushing the pound to some of the
lowest levels against the U.S. dollar seen in more than three
decades.
"I get the sense we are at last entering the territory we
thought we would be in in June, and the period of 'business as
usual' is coming to an end," said Peter Dixon, economist at
Commerzbank.
There were some chinks of light in the pan-European index.
Airline carrier Lufthansa soared to the top of
Germany's DAX after an Italian paper reported Saudi telecoms
company Etihad was interested in taking an equity stake in it.
Swiss chocolate maker Lindt saw its shares gain 5.2
percent after it succeeded in increasing sales in Europe, Japan
and Brazil, facing down headwinds of low consumer confidence.
Basic resources stocks were the biggest sectoral fallers,
with the basic resources index down 1.2 percent, dragged
down by lower metals prices caused by a stronger dollar with
markets spooked over Brexit.
Anglo American, BHP Billiton and Antofagasta
were down 1.6 to 1.8 percent. Arcelormittal
was the worst-performing stock in the CAC 40.
Shares in German fashion retailer Zalando slumped
6.5 percent after its sales growth disappointed expectations.
Mediaset was down 3.8 percent after a report,
without citing sources, said a potential takeover offer for the
Italian broadcaster by France's Vivendi would not be
'judicially acceptable' for Italian communications authority
AGCOM.
Carmakers took some strain again as U.S. President-elect
Donald Trump's threat to slap import tariffs on cars made in
Mexico rippled through the market.
Peugeot was a top faller in France's CAC index,
down 1.6 percent, while German carmakers Volkswagen,
Daimler and BMW continued to weigh on the
DAX.
Italy's blue-chip FTSE MIB was the only major
European index in positive territory, boosted by an upswing in
banks Banco BPM, UBI Banca, BPER Banca
and Unicredit.
"Since the Italian referendum, market repair has
accelerated: while the stock of non-performing loans at banks is
likely to take time to revert to average levels, a series of
announcements by banks should be positive steps towards market
repair," a Goldman Sachs note said.