EUROPE MARKETS: European Stocks Drop As Trump Worries Rattle Markets

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Euro rises above $1.11 for first time since U.S. presidential election

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European stocks fell Wednesday, keying off losses in U.S. stock futures seen as driven by political worries over U.S. President Donald Trump.

Concerns grew after The New York Times reported that Trump had asked James Comey, then director of the Federal Bureau of Investigation, to stop his investigation into links between Trump's associates and Russian officials (http://www.marketwatch.com/story/us-stock-futures-under-pressure-amid-fresh-concerns-over-trump-2017-05-17).

The Stoxx Europe 600 index ) lost 0.2% to 395.12, with only the basic materials sector moving higher, after ending slightly higher Tuesday (http://www.marketwatch.com/story/european-oil-mining-shares-bounce-up-outpacing-broader-market-2017-05-15). In the U.S., Dow Jones Industrial Average futures (http://www.marketwatch.com/story/us-stock-futures-slide-as-concerns-over-trump-grow-2017-05-17) fell 85 points and S&P 500 futures shed 0.5%.

"Given that the 'Trump trade' is one of the main reasons the market has been able to break records of late, it is understandable that the scandal engulfing the U.S. government would be of some concern to investors," said Spreadex financial analyst Connor Campbell, in a note.

"That's because this crisis will likely prevent Trump from pushing through the very policies -- like his huge infrastructure plans and generous tax cuts -- that fueled much of the recent rally any time soon, undermining the basis for the current highs."

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Individual indexes: Germany's DAX 30 , which has notched record closing highs in recent sessions, dropped 0.2% to 12,775.59. France's CAC 40 declined 0.4% to 5,386.49.

In London, the FTSE 100 was fractionally higher at 7,525.25. Italy's FTSE MIB dropped 0.6% to 21,657, and Spain's IBEX 35 moved down 0.3% to 10,948.

Stock movers: Tullow Oil PLC (TLW.LN) shares climbed 4%, topping the Stoxx 600 index, after the oil producer said it struck oil at a well in Kenya's South Lockihar Basin.

Ubisoft Entertainment SA (UBI.FR) shares fell 6%, trading at the bottom of the pan-European index, although the maker of the upcoming "Far Cry 5" video game posted a rise in full-year profit.

Meanwhile, the euro hit an intraday high of $1.1124, according to FactSet data, as the U.S. dollar lost ground (http://www.marketwatch.com/story/dollar-edges-down-as-analysts-blame-trump-worries-2017-05-17) against major rivals. The euro has not traded above $1.11 since around the time of the November presidential election. The shared currency has now pared its gain to $1.1092.

As the dollar pulled back, most dollar-denominated metals prices moved higher, aiding the basic resources group of stocks in Europe.

(END) Dow Jones Newswires

May 17, 2017 05:24 ET (09:24 GMT)