European stocks struggle amid Brexit fears

European stocks struggle amid Brexit fears

Europe’s stock markets dipped lower yesterday, as investors digested downbeat German economic data and fears continued over the looming threat of a no-deal Brexit.

Frankfurt dropped 0.3 per cent as official figures showed that industrial orders in Germany fell back in December, the latest sign of a slowdown in Europe's largest economy.

The news also sent the European single currency down to $1.138 - the lowest level since January 25.

London stocks, meanwhile, slipped by 0.1 per cent, with online supermarket Ocado hit by a warehouse fire, and lingering concerns over Britain leaving the European Union without a deal next month.

Japanese car giant Toyota weighed in on the issue after slashing its net profit forecast, saying there was no way to avoid a negative impact in the event of a no-deal Brexit.

German statistics office Destatis said the country's factory orders were down by 1.6 per cent from the previous month.

“European equities are on the back foot after a surprise drop in German factory orders this morning added to signs that the region’s strongest economy is struggling,” Oanda analyst Dean Popplewell commented.

“The euro has fallen to its lowest level outright in a fortnight on the news. December saw German factory orders decline at the fastest rate in six months, helping pile further misery on a eurozone which is clearly struggling amid global trade woes,” added IG analyst Joshua Mahony.

“With Brexit uncertainty and US-led trade friction, this decrease in factory orders highlights the weaker demand” often associated with significant upheaval and uncertainty.

Mercedes-Benz maker Daimler added to the bad news, reporting its worst year since 2015.

France’s CAC 40 market was down 0.1 percent following French banking group BNP Paribas reporting a dip in profits.

Wall Street opened slightly lower, a day after US President Donald Trump’s annual State of the Union address.

Mr Trump touched upon a number of issues including the China trade war, North Korea, the Russia investigation and healthcare.

US Treasury Secretary Steven Mnuchin said both sides in the US-China trade negotiations were working to reach an agreement by the March 1 deadline.

He also said the US economy is “still very strong”.

“The US economy continues to perform extremely well amid signs of a slowdown in Europe and other parts of the world,” he said.

In Asia, Tokyo and Sydney shares rose in another holiday-thinned trading day, with most of Asia off for the Lunar New Year.

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