European stocks end lower ahead of German election

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European stock markets closed in negative territory on Friday ahead of this weekend’s German election and as traders continued to monitor developments surrounding Chinese real estate company Evergrande.

The French CAC 40 and Swiss Market Index fell 1% each, the German DAX closed down 0.7% and the UK FTSE 100 fell 0.4%. The Stoxx Europe 600 fell 0.9%.

The markets will watch the German federal elections on Sunday. Business expectations in the country fell to 97.3 points in September from 97.8 in August, marking the third consecutive monthly decline, according to data released by the Ifo Institute.

European Central Bank President Christine Lagarde told CNBC on Thursday that the continent’s direct exposure to Evergrande should be “limited”. Some fear that a potential Evergrande default could threaten markets beyond China.

The UK consumer confidence index GfK fell to -13 in September from -8 in August, due to rising prices and headline inflation, tax hikes, empty shelves, as well as end of leave plan, according to a statement. The last reading missed the index estimate holding the -8 level.

The UK government plans to implement legislative reforms to its financial rules following criticism of a report on the collapse of Greensill Capital, media reported, which cited a letter. Chancellor Rishi Sunak said the Treasury could implement reforms to strengthen oversight of appointed officials to “prevent opportunities for abuse of the system.” At the same time, the government could also make reforms to changing supervisory rules to move banks away from owners who would not be granted full banking licenses.

UK Finance’s banks and asset managers are backing the Finance Ministry’s proposal to remove its obligation to trade stocks in order to increase competition between companies, Reuters reported, citing a statement from the trade association. Following a review of UK capital markets post-Brexit, the Department of Finance presented its recommendation to remove the obligation to trade stocks which requires market participants to use specific venues, such as the stock exchanges , to negotiate.

European Union member states remain divided and have yet to set climate change targets for the bloc to present to the COP26 climate change conference in November, Reuters reported, citing officials and EU documents. The 27 member states, which must unanimously endorse the EU’s position, have yet to decide whether they will set five or ten year timeframes for climate targets. Most countries, including France, Denmark, the Netherlands, Spain and Luxembourg, support five-year targets, while countries like Poland, Romania and Bulgaria want to allow countries to select time frames. to achieve the goals.

On the business side, Petrofac (PFC.L) rose 26% after the company signed a deal with the UK Serious Fraud Office and plans to plead guilty to seven counts of failing to stop its employees from bribing agents for projects in Iraq. , Saudi Arabia and the United Arab Emirates. Problems related to the project were won between 2012 and 2015. The regulator will determine the penalty for the company on September 27. Employees facing the charges have left the company, Petrofac said.

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