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European stocks open lower as focus turns to U.S. debt; Dax down 0.18%

Published 09/20/2013, 03:36 AM
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Investing.com - European stocks opened lower on Friday, as concerns over the U.S. debt ceiling overshadowed recent news that the Federal Reserve is holding its stimulus program, while markets also eyed upcoming elections in Germany.

During European morning trade, the EURO STOXX 50 edged down 0.10%, France’s CAC 40 shed 0.20%, while Germany’s DAX 30 slipped 0.18%.

Markets were jittery, as U.S. Republicans and Democrats must quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling.

If President Barack Obama's administration and Republicans do not agree to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default.

Separately, investors were eyeing the outcome of Germany's general election on Sunday, with Chancellor Angela Merkel looking to secure a third term.

Financial stocks edged lower, as French lenders BNP Paribas and Societe Generale fell 0.02% and 0.56%, while Germany's Deutsche Bank dipped 0.05%.

The German bank earlier won an appeal overturning a Singapore ruling ordering it to pay former client Chang Tse Wen USD49 million for negligence in advising him on his investments.

Among peripheral lenders, Spanish banks Banco Santander and BBVA retreated 0.45% and 0.73% respectively, while Italy's Intesa Sanpaolo and Unicredit tumbled 0.88% and 1.01%.

Elsewhere, Adidas plummeted 4.76% after the maker of sporting goods cut the low end of its 2013 profit forecast by 7.9%, citing the euro’s strength, a glitch in a Russian distribution site and weakness in the global golf market.

In London, commodity-heavy FTSE 100 fell 0.15%, weighed by losses in mining stocks.

Shares in Glencore Xstrata declined 0.85% and Rio Tinto retreated 2.47%, while Randgold Resources and Polymetal plunged 2.73% and 4.76% respectively.

Financial stocks were also mostly lower, as HSBC Holdings slid 0.45% and Barclays lost 0.64%, while the Royal Bank of Scotland tumbled 0.89%.

Lloyds Banking overperformed on the other hand, up 0.25%, amid reports bidders including Westpac Banking, Macquarie Group, Pepper Australia Pty and Australia & New Zealand Banking Group are preparing final binding offers for the British lender's Australian assets.

In the U.S., equity markets pointed to a moderately lower open. The Dow Jones Industrial Average futures pointed to a 0.09% loss, S&P 500 futures signaled a 0.11% fall, while the Nasdaq 100 futures indicated a 0.03% dip.

Trading volumes were expected to remain light on Friday, with no U.S. economic data to be released throughout the session.


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