European shares inched lower on Wednesday as worries of a looming global recession kept investors from making bold bets, while a dive in the pound over fears of a disorderly Brexit pushed British stocks higher.
The pan-European STOXX 600 index ended 0.2% lower paring deep losses from the morning, helped by London’s exporter-heavy FTSE 100 as sterling tumbled after Prime Minister Boris Johnson announced plans to suspend parliament.
Johnson’s move, approved by Queen Elizabeth, limits the British parliament’s ability to derail his Brexit plans, stoking fears of an economically disruptive no-deal departure from the European Union on Oct. 31.
“Although he is using normal parliamentary procedure, what’s different is the accusation that it is a device to limit the ability of those who oppose a no-deal Brexit to debate and plan,” said Ken Odeluga, market analyst at City Index in London.
UK house-builders were the hardest hit on worries that a hard Brexit would damage the British economy. Persimmon, Berkeley were the biggest decliners on the FTSE 100, down 3% to 5%.
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Dublin stocks sensitive to Brexit news fell 1.3% with Irish low-cost carrier Ryanair falling nearly 2%.
The picture was more mixed for the rest of Europe, with Germany’s trade-sensitive DAX ending lower, but bank-heavy Madrid stocks finishing in the positive territory.
Milan stocks ended flat, reversing earlier losses as Italy appeared to be nearing the end of its latest political turmoil with the opposition Democratic Party (PD) saying it was ready to form a coalition with the 5-Star Movement.
Frontpage August 26, 2019