European stocks fall for second straight session as Middle East tensions escalate

Economies.com
2019-06-24 11:56AM UTC

European shares fell on Monday in the first session of the week, continuing losses for the second session in a row, with correction and profit taking from the highest level in six weeks, in addition to risk aversion to concerns about the escalation of geopolitical tensions in the Middle East, and the decline of the automotive sector led by Daimler after a profit warning.

 

As of 11:15 GMT, Stoxx Europe 600 fell 0.4% and the index ended Friday's session down by 0.4%, the first loss in four sessions, on correction and profit taking after recording earlier in the session the highest level in six Weeks.

 

Over the course of last week's sessions, the index rose 2.4%, the third weekly gain in a row, after central banks in Europe and the United States hinted at easing monetary policy to cope with the economic slowdown.

 

The index fell on Monday morning in the first session of the week to continue its decline for the second session in a row, with corrections and profit taking continuing from the highest level in six weeks, with most of the major markets and sectors in the negative region.

 

The United States plans to impose new major sanctions on Iran despite pressure from European leaders to urge Washington and Tehran to exercise restraint and avoid escalation.

 

US President Donald Trump and Foreign Minister Mike Pompeo said at the weekend that the White House is ready to negotiate with Iran without preconditions.

 

The developments came a few days after the rising of geopolitical tensions between the two countries after Tehran dropped a US drone.

 

The automaker sector is the top loser in Europe with a 1.5% drop, with Daimler falling more than 5% after a profit warning.

 

Daimler lowered its profit forecast for 2019 on Sunday and raised provisions for diesel vehicles worth hundreds of millions of euros.

 

S&P 500 futures fell more than 0.3%, and the index ended Friday's session down more than 0.1%, the first loss in five sessions, on profit-taking, after the index hit the highest level in seven weeks in the previous session.

 

Euro Stoxx 50 fell more than 0.4%. with France's CAC 40 index falling 0.2%. while in Germany, the DAX index fell 0.6% to top the list of losing markets in Europe.

 

In London, the FTSE 100 lost about 0.1%, ahead of the last round of voting among the Conservative members of parliament to choose the most favourable candidate, Boris Johnson, or Foreign Secretary Jeremy Hunt to become the new British prime minister.

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