Euro sinks to 10-week low against the pound
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European stocks struggled for direction in Tuesday's trade, as traders digested the latest flare up in U.S.-North Korea tensions and as the euro continued to slide after Germany's general election over the weekend.
The Stoxx Europe 600 index was marginally lower at 383.85, and was swinging between small gains and losses.
Most country-specific indexes were seesawing after North Korea's foreign minister late in Monday's session claimed the U.S. has declared war on the isolated state (http://www.marketwatch.com/story/north-korean-official-says-us-has-declared-war-2017-09-25-13103598).
That has left Pyongyang with "every right to make countermeasures, including the right to shoot down U.S. strategic bombers, even if they are not yet inside the airspace border of our country," the foreign minister said.
U.S. stocks ended lower on Monday (http://www.marketwatch.com/story/us-stocks-set-to-struggle-as-investors-look-for-guidance-from-fed-speakers-2017-09-25) following the comments, and futures pointed to a slightly lower on Tuesday (http://www.marketwatch.com/story/dow-industrials-flirt-with-fourth-daily-drop-in-a-row-2017-09-26) as well.
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"So far, every aggressive selloff in equities and move to safe havens on geopolitical risks, has proven to be short-lived," said Hussein Sayed, chief market strategist at FXTM, in a note.
"The best-case scenario is for the U.S. to add more pressure on China and Russia, to increase sanctions against Pyongyang and pressure Kim Jong Un to sit around a negotiation table. However, as an investor, you should keep all options on the table," he added.
Euro selloff: The euro slumped to a 10-week low against the pound, fetching GBP0.8765, down from GBP0.8798 late Monday in New York. Against the dollar, the euro dropped to $1.1814 from $1.1850 on Monday.
The euro also declined Monday after Germany's election on Sunday where Chancellor Angela Merkel's conservative alliance secured a fourth term in power, but nonetheless registered a sharp drop in her party's overall support. Instead, the anti-immigrant and euroskeptic Alternative for Germany saw a big increase in votes and won seats in the Bundestag for the first time.
"Merkel now faces tough and potentially protracted coalition talks. Her weakened position is likely to limit the degree of support she can offer France's Macron as he attempts to move towards closer integration for the EU," said analysts at Rabobank in a note.
Read:How Merkel's choice of partner could set the tone for the euro (http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)
(http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)Meanwhile, euro investors were also fretting about an independence referendum in the Spanish region of Catalonia (http://www.marketwatch.com/story/german-election-result-revives-eurozone-jitters-as-investors-turn-attention-to-spain-2017-09-25) on Sunday, although the central government in Madrid has declared the vote illegal.
Indexes: Spain's IBEX 35 index was down 0.1% at 10,203.20 on Tuesday, while Germany's DAX 30 index gained 0.1% to 12,607.48.
France's CAC 40 index was marginally higher at 5,269.06, and the U.K.'s FTSE 100 index fell 0.2% to 7,284.69.
Stock movers: Shares of Nestlé SA (NESN.EB) (NESN.EB) climbed 1% after the consumer goods giant said it will accelerate its share buyback plan (http://www.marketwatch.com/story/nestle-to-accelerate-share-buybacks-2017-09-26) and confirmed its 2020 organic growth target.
Oil companies were also higher, climbing after oil prices spiked overnight (http://www.marketwatch.com/story/oil-futures-pull-back-after-entering-bull-market-2017-09-26) following a threat from Turkey's president to cut off oil exports from a Kurdish region of Iraq (http://www.marketwatch.com/story/oil-futures-pull-back-after-entering-bull-market-2017-09-26). Shares of Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) gained 0.6%, BP PLC (BP.LN)(BP.LN) added 0.5% and Statoil ASA (STL.OS) climbed 0.7%.
Shares of Informa PLC (INF.LN) lost 0.8% after the events and publishing company said it has taken over open access publisher Dove Medical Press for an undisclosed sum (http://www.marketwatch.com/story/informa-in-deal-to-buy-dove-medical-press-2017-09-26).
Norsk Hydro ASA (NHYDY) fell 1.1%. The loss came after competition authorities approved the Norwegian aluminum maker's takeover of Orkla ASA's (ORK.OS) 50% interest in joint venture Sapa.
(END) Dow Jones Newswires
September 26, 2017 05:33 ET (09:33 GMT)