The FINANCIAL — European stocks fell Monday, along with the euro, with investors skeptical that this week's European Union summit will yield any real progress.
At 0810 GMT, the benchmark Stoxx 600 index was down 0.9% at 244.25. The U.K.'s FTSE 100 index was off 0.6% at 5481.17, Germany's DAX was down 1.5% at 6171.72 and France's CAC-40 was off 1.4% at 3047.95.
In the "periphery," Spain's IBEX-35 index was down 1.9% at 6747.70, Italy's FTSE Mib was down 2.4% at 13,341.09 and Greece's ASE index was 3.1% lower at 589.37.
At the same time, the euro was weaker against the dollar, fetching $1.2500 from $1.2574 late Friday in New York, trading in a tight range. "We expect the pressure on both Europe and its financial system to resume, encouraging further depreciation of the euro," said Standard Chartered. Elsewhere, the dollar was at Y80.10 from Y80.43.
As investors shunned risk assets, the September bund contract was up 60 ticks at 141.48.
Peripheral bond markets were under pressure. The 10-year Spanish government bond yield was up 15.5 basis points at 6.44%, while the corresponding Italian yield was up 11.5 basis points at 5.85%.
Equity markets are expected to remain fairly range-bound in the run-up to the summit, which takes place Thursday and Friday. Various issues are on the agenda such as a potential renegotiation of Greece's bailout terms, and proposals to a create fiscal and banking union. Some form of growth stimulus is also expected to be announced. At pre-summit talks in Rome, German, French, Italian and Spanish leaders agreed that the EU should implement a series of growth measures worth around 1% of the euro area's gross domestic product, or 130 billion euros ($163.32 billion).
Overall, though, expectations for the summit are pretty low. "Unfortunately, that may be all the summit delivers, with Germany continuing to resist proposals for common debt issuance or more flexible usage of existing bailout funds," said Rebecca O'Keeffe, head of investment at Interactive Investor.
As far as Greece is concerned, officials from the troika of its creditors–the European Commission, International Monetary Fund and European Central Bank–have postponed a visit that was due to start Monday, after both the prime minister and the finance minister were hit by health problems.
As for Spain, its government has just made a formal request for financial assistance from the EU.
Corporate news was thin on the ground Monday. Anheuser-Busch InBev NV added 1.2% on news the company is close to taking control of Corona Extra beer maker Grupo Modelo SAB de CV, in a deal that could be valued at more than $10 billion. Liberum Capital said that the figures discussed make the deal attractive and just on normal synergies could boost AB Inbev's earnings by around 10%.
According to Borsa Italiana – London Stock Exchange Group, in London, Shire shares slumped 10.5% after the U.S. Food and Drug Administration approved a generic version of its hyperactivity drug Adderall. Goldman Sachs, which hadn't expected such a development before 2014, said Adderall represents around 6% to 8% of Shire's top line on an organic basis and, while the company is unlikely to lose the entire franchise, it could lose 50% of its market share.
Among commodities, spot gold was at $1569.70 a troy ounce, down $3.10 from New York, while August Nymex crude oil futures were down 52 cents at $79.24 per barrel and August Brent futures were down 62 cents at $90.36.
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