Europe Stocks Little Changed as May to Put Brexit Deal to Vote

May: U.K. Strong, More Outward-Looking Post-Brexit

European stocks closed little changed, paring earlier declines, after U.K. Prime Minister Theresa May said parliament will get a vote on the Brexit deal in which the country will seek to exit the European Union’s single market.

The Stoxx Europe 600 index dropped 0.2 percent at the close, recovering from an intraday slide of 0.7 percent but still held lower by declines in miners and personal-and-household goods companies. May ruled out continued membership in the single market, while saying that she doesn’t want the EU to unravel following her nation’s vote to leave last June.

  • The FTSE 100 Index of megacaps slid 1.5 percent, the most among major European benchmarks, amid concern a stronger pound will hurt companies that get most of their revenue overseas. The FTSE 250 Index of midcaps with more domestic exposure fell 0.4x percent.
  • European shares tumbled yesterday on news reports that May would say the U.K. will quit the EU’s single market and U.S. President-elect Donald Trump suggested other countries may follow it out of the bloc. She said today the exit would be “smooth” and “orderly.”
  • “All in all the speech is supportive for European stocks and the pound, while it’s quite bad news for the FTSE 100,” Pierre Martin, trader at Saxo Bank in London, said by phone.
  • Despite worries over Brexit, sentiment toward European stocks is improving, according to a fund manager survey from Bank of America-Merrill Lynch. Global fund-manager allocations to euro-area equities rose to a net 17 percent overweight from a net 1 percent underweight last month, BofAML strategists wrote in note.

— With assistance by Elena Popina, and Benjamin Dow

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