Saudi shake-up rattles some
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European stocks drifted lower Monday, as a political shake-up in Saudi Arabia caused some jitters, and with a drop for banks dragging on the region's main index.
A slowdown in services activity weighed on shares in Spain, already battered by the ongoing political crisis over independence for Catalonia.
What markets are doing: Germany's DAX 30 index fell 0.2% to 13,455.36 after finishing Friday at an all-time closing high of 13,478.86.
Also pulling back from Friday's closing record, the U.K.'s FTSE 100 was off 0.2% at 7,548.19.
Spain's IBEX 35 dropped 0.4% to 10,313.80, and France's CAC 40 shed 0.1% at 5,509.00.
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Those muted moves left the Stoxx Europe 600 index down less than 1 point at 395.96. On Wednesday last week, the pan-regional index hit its highest level in more than two years (http://www.marketwatch.com/story/european-stocks-leap-to-2-year-high-as-commodity-shares-march-up-2017-11-01).
Banks weigh: The Stoxx Europe 600 Bank Index lost 0.6%. Societe Generale SA (GLE.FR) shares dropped 3.5%, extending Friday's slide of 4% after a disappointing earnings report.
The U.S. Justice Department and Federal Bureau of Investigation are investigating three European banks for their roles (http://www.marketwatch.com/story/us-probes-credit-suisse-bnp-paribas-vtb-over-mozambique-debt-sales-2017-11-06) in selling about $2 billion of debt for Mozambique, according to a report from The Wall Street Journal.
What's moving markets: Investors were assessing the news that Saudi Arabian officials and members of the royal family were detained at the weekend, including tycoon Prince al-Waleed bin Talal, as part of an anticorruption crackdown.
Read:Detained Saudi prince has wide range of investments in Western companies (http://www.marketwatch.com/story/detained-saudi-prince-has-wide-range-of-investments-in-western-companies-2017-11-05)
The arrests of such high-profile figures are seen as a dramatic escalation in the effort by Prince Mohammed bin Salman, the recently appointed crown prince, to consolidate power and accelerate far-reaching change (http://www.marketwatch.com/story/stunning-saudi-purge-solidifies-crown-princes-power-2017-11-05) in the kingdom.
Turkey's central bank on Monday took steps to support price and financial stability (http://www.marketwatch.com/story/turkeys-central-bank-acts-to-support-falling-lira-2017-11-06), after the Turkish lira's recent slump against the dollar. The tweak to its reserve option mechanism will withdraw about 5.3 billion lira ($1.37 billion) of liquidity from the market and provide banks with approximately $1.4 billion of liquidity, the Central Bank of the Republic of Turkey said.
The euro traded at $1.1605, barely budging from $1.1610 late Friday in New York.
What strategists are saying: "European equity markets are slightly in the red as traders lock in their profits from last week's broadly positive move. The DAX and the CAC 40 saw fresh record highs last week, while the FTSE 100 hit a multi-month high, so a small pullback today is hardly surprising," said CMC Markets analyst David Madden in a note.
"The price of oil has rallied after power is starting to shift towards Mohammaed bin Salman -- the crown prince of Saudi Arabia. Mohammaed bin Salman is in favour of the OPEC production cut, and traders are fearful the co-ordinated production freeze may be extended," he added.
Stock movers: Shares of Accor SA (AC.FR) were down 1.3%. Saudi Prince Al-waleed bin Talal's Kingdom Holding Co. owns a 5.71% stake in the hotel properties company, according to FactSet data.
SBM Offshore NV shares shares tumbled 11% after the Netherlands-based oil-services company said it has made a provision of $238 million (http://www.marketwatch.com/story/sbm-makes-238-mln-provision-against-us-problems-2017-11-06) against issues in the U.S. related to potential improper sales practices.
BTG PLC (BTG.LN) dropped 5% after the health care company said it would make a provision of 53.5 million pounds (http://www.marketwatch.com/story/btg-makes-70-million-provision-after-us-ruling-2017-11-06) ($70 million) to cover damages and other costs related to a U.S. court ruling.
Vopak NV fell 2.1% as the provider of tank storage services reported a 25% fall in third-quarter net profit, (http://www.marketwatch.com/story/vopak-profit-falls-25-on-lower-occupancy-rate-2017-11-06) citing lower occupancy rates.
Economic docket: Spain's service sector activity was the slowest since January on reports that political uncertainty in the Catalonia region dampened growth, IHS Markit said Monday. The seasonally adjusted reading of 54.6 in October was down from 56.7 in September and below the FactSet estimate of 55.4.
In Germany, new orders in manufacturing increased by 1.0% on the month (http://www.marketwatch.com/story/german-manufacturing-orders-rise-beat-forecasts-2017-11-06) in September, beating expectations of a 1.3% decline. The unexpectedly strong reading points to a resilient growth pace in the German economy, analysts said.
Sicily vote: A center-right coalition headlined by former Italian Prime Minister Silvio Berlusconi appeared to have edged out the antiestablishment 5 Star Movement in Sunday's regional elections in Sicily (http://www.marketwatch.com/story/berlusconi-coalition-takes-lead-in-sicily-vote-exit-polls-show-2017-11-06), according to exit polls, but the solid showing by both groups suggest they could perform well in national elections next year.
(END) Dow Jones Newswires
November 06, 2017 06:21 ET (11:21 GMT)