LONDON Oct 7 European stocks fell on Monday as
a lack of progress in resolving U.S. government disputes over
the federal budget and debt ceiling dented confidence in the
world's largest economy.
The FTSEurofirst 300 index of pan-European shares
fell 0.5 percent to 1,237.38 points while the euro zone Euro
STOXX 50 shed 0.7 percent to 2,907.28 points.
U.S. Democrats and Republicans came no closer on Sunday to a
budget agreement that would end a government shutdown, let alone
reaching a deal on the U.S. borrowing limit by Oct. 17 to avoid
Many market players still expected a deal to be reached but
said volatility was likely in the short term. Volatility on the
Euro STOXX 50 ended last week just shy of 20.
"We're going to wobble our way down until about Thursday and
then there's going to be a solution and there will be a
melt-up," or rise in market prices, said Justin Haque, a broker
at Hobart Capital Markets.
He expected the Euro STOXX 50 to fall by between 1.5 percent
and 2.5 percent before an agreement is reached.
The Euro STOXX 50 is less than 1 percent away from a
two-year high hit in September but has flat-lined over the past
two weeks as the deadlock in the United States and a political
crisis in Italy curbed appetite for stocks.