Traders Update: European stocks were flat Monday morning
European stocks were flat Monday morning, after stronger-than-anticipated jobs data on Wall Street tempered expectations for a Federal Reserve rate cut.
The pan-European Stoxx 600 was little changed from the previous session shortly after the opening bell, with sectors and major bourses pointing in opposite directions.
Europe’s basic resources stocks led the gains during mid-morning deals, up almost 1%. ArcelorMittal, Tenaris and Rio Tinto were among the sector’s best performers, all trading more than 1.5% higher.
Looking at individual stocks, Deutsche Bank surged towards the top of the European benchmark shortly after the opening bell, before paring most of its gains during mid-morning trade.
Germany’s flagship lender announced Sunday that it would pull out of its global equities sales and trading operations, scale back its investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability. Shares of Deutsche Bank were down around 0.5% at around 10:00 a.m. London time.
Meanwhile, Spain’s Enagas tumbled to the bottom of the index after a flurry of target price downgrades from RBC, J.P. Morgan and Kepler Cheuvreux. Shares of the utilities firm slipped nearly 7% on the news.
Global equities have generally been boosted by rising expectations that central banks will keep interest rates at or near record lows to boost economic growth.
Those expectations were tempered by a closely-watched U.S. labor report on Friday. Nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000, running contrary to worries that both the employment and overall growth picture was beginning to weaken.
In currency markets, the Turkish lira weakened to its lowest level since late June after the country’s central bank governor, Murat Cetinkaya — whose four-year term was due to run until 2020 — was replaced by Murat Uysal.
Turkish President Tayyip Erdogan sacked Cetinkaya for refusing the government’s repeated demands to cut interest rates, raising questions over the central bank’s independence.
The lira pared some of its losses to trade at around 5.7520 Monday morning.