European stocks edge down on Brexit, trade war fears

(Reuters) - European shares edged lower on Wednesday on unease over developments in the U.S.-China trade war and Britain’s uncertain departure from the European Union.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 20, 2019. REUTERS/Staff

The pan-European STOXX 600 index closed down 0.08% with losses on Italy’s MIB and France’s CAC offset by gains in Britain’s FTSE 100 and Germany’s DAX.

Banks and Brexit-sensitive stocks led losses as some investors switched into safe-haven euro zone bonds as pressure grew on UK Prime Minister Theresa May to resign after lawmakers in her own party rejected her compromise deal on exiting the EU.

A Report that the United States is considering curbs on Chinese video surveillance firm Hikvision added to investor concerns.

“Sentiment remains fragile as investors digest the changing face of the trade dispute from broad sweeping tariffs to direct action against single Chinese companies,” Jasper Lawler, head of research at futures brokerage London Capital Group, wrote in a note.

Europe’s banking index fell 1.2% to an over four-month low with Banco Santander, Lloyds and Barclays shedding between 1.1% and 2.7%.

London’s FTSE 100 pared most of its early gains to close 0.07% higher as declines in Brexit-sensitive stocks such as housebuilders and retailers accelerated. The exporter-heavy index had outperformed its peers earlier in the session bolstered by a weak pound.

Homebuilders Taylor Wimpey, Berkeley Group and <Persimmon PSN.L> fell sharply, while retailers were led lower by Marks & Spencer after it reported a third straight decline in full-year profit.

Germany’s trade-sensitive DAX closed 0.2% higher, recovering from a 0.7% fall earlier in the day.

Payments company Wirecard’s jumped 5.9% on a partnership deal in India over identity cards.

At the top of the STOXX 600 was online financial trading platform IG Group Holdings Plc, after it unveiled a plan to drive growth even as it forecast a sharp fall in full-year net trading revenue and operating profit.

Danish IT software company SimCorp soared 11% as it affirmed guidance, dispelling market fears of an outlook cut after reporting quarterly results that beat expectations.

Reporting by Medha Singh, Agamoni Ghosh and Susan Mathew in Bengaluru; editing by William Maclean and John Stonestreet