Queen's Speech in focus as U.K. government races for deal
European stocks marched lower Wednesday, as the energy sector was dragged down by sliding oil prices and as the departure of a key ally of President Emmanuel Macron hit French equities.
Continue Reading Below
The Stoxx Europe 600 lost 0.7% at 386.97, on course for a second straight loss. All sectors were in the red, led by financial and technology shares.
The index tracking European oil and gas stocks was down 0.6% as oil prices moved lower. They slid into a bear market on Tuesday (http://www.marketwatch.com/story/oil-hovers-at-seven-month-low-as-investors-weigh-up-supply-issues-2017-06-20) driven down by continuing worries about a global oil glut as output cuts from the Organization of the Petroleum Exporting Countries were offset by production rises elsewhere. An recent increase in supply by Libya was a factor.
In the oil-producer group, Norway's Statoil ASA (STL.OS) fell 0.8%, Tullow Oil PLC (TLW.LN) lost 0.7%, and France's Total SA (TOT) shed 0.5%.
Among energy equipment and services companies, Petrofac Ltd. (PFC.LN) dropped 2.2% and Italy's Saipem SpA (SPM.MI) was off 1.5%, but Subsea 7 SA (SUBC.OS) rose 3.1%.
A weekly supply update from the Energy Information Administration is due at 10:30 a.m. Eastern Time Wednesday. Analysts polled by S&P Global Platts expect the EIA to report a decline of 2 million barrels in crude inventories. Late Tuesday, the American Petroleum Institute reported a weekly decline of 2.7 million barrels in U.S. crude supplies (http://www.marketwatch.com/story/api-data-show-a-weekly-decline-in-us-crude-supply-sources-say-2017-06-20).
France battered: France's CAC 40 index lost the most ground among major benchmarks as it dropped 1% to 5,240.62, with just three components moving higher.
The market was under pressure after the country's Justice Minister François Bayrou left government Wednesday (http://www.marketwatch.com/story/frances-justice-minister-a-key-macron-ally-quits-government-2017-06-21). Bayrou was a key ally who rallied centrists to Macron's successful election campaign.
Bayrou's centrist party Mouvement Démocrate, or MoDem, is in a preliminary probe into allegations related to jobs at the European Parliament. Bayrou was reportedly set to give a press conference later Wednesday.
The CAC's biggest decliners were hospitality services company Sodexo SA (SW.FR) , down 2.7%, and AXA SA (AXAHY) , 2.6% lower. But industrials metals company ArcelorMittal SA (MT) picked up 1%.
Individual indexes: Germany's DAX 30 shed 0.3% to 12,717.03, backing further away from Monday's record close. Spain's IBEX 35 was off 0.7% at 10,669.
In London, the FTSE 100 was down 0.3% at 7,448.24, with financial, oil and gas and consumer-goods shares lower.
Meanwhile, the pound dropped below $1.26 before the formal opening of parliament, when Queen Elizabeth II will set out the government's agenda in a speech. However, Prime Minister Theresa May's plan to form a government with the support of the Democratic Unionist Party looked in doubt, after media reports cast doubt (http://www.telegraph.co.uk/news/2017/06/21/theresa-mays-deputy-damian-greencasts-doubt-dup-deal/?utm_source=dlvr.it&utm_medium=twitter) on her Conservative Party's prospects of sealing a deal with the party from Northern Ireland.
Coverage of the Queen's Speech will begin at 11:15 a.m. London time (http://www.parliament.uk/business/news/2017/june/state-opening-of-parliament-2017/), or 6:15 a.m. Eastern Time.
Stock movers: Whitbread PLC shares (WTB.LN) climbed 4.5% to top the Stoxx 600. The parent company of the Costa Coffee and Premier Inn hotels chain posted a rise of 2.9% in fiscal first-quarter comparable sales (http://www.marketwatch.com/story/whitbread-quarterly-same-store-sales-rise-2017-06-21). Total sales rose 7.6%.
Provident Financial PLC (PFG.LN) sank 16% after a warning about adjusted profit from the credit company.
(END) Dow Jones Newswires
June 21, 2017 05:44 ET (09:44 GMT)