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What to Watch: Stocks tumble, French economy falters, Brexit court ruling

The negative momentum in stock markets last week has continued into Monday. Photo: Carl Court/Getty Images
The negative momentum in stock markets last week has continued into Monday. Photo: Carl Court/Getty Images

Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:

Stocks keep dropping

US-China trade tensions and heightened Brexit uncertainty contributed to a slide in European stocks on Monday.

Britain’s FTSE 100 (^FTSE) and France’s CAC 40 (^FCHI) were both down about 0.5% in morning trading. Germany’s DAX (^GDAXI) was sliding by roughly 0.7%.

Shaunak Mazumder, a senior fund manager at Legal & General Investment Management, said a combination of worries about the US-China trade row and the Brexit vote was weighing on the market.

“The market is lacking proper conviction. If the US-China issue blows over, that could give support to the market. But it’s difficult to call,” he added.

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Shares in BASF (BAS.DE) fell by roughly 5% after the German chemicals firm slashed its forecast for 2018 profits on Friday.

Shares in London-traded Interserve (IRV.L) sank by more than 50% on Monday after it announced a rescue plan that sought to avoid a Carillion-style collapse by converting much of its debt into new shares.

Shares in struggling travel group Thomas Cook (TCG.L) dropped another 7% on Monday morning. The company has lost about 80% of its stock market value in less than a year.

US stock futures were also pushing down on Monday. All the key Asian markets ended the day with losses.

French economy strangled by protests

French economic growth is set to slow to a near standstill in the final quarter of 2018 as waves of anti-government protests hit business activity, according to a new estimate from the country’s central bank.

The Bank of France forecast that the eurozone’s second-biggest economy would eke out growth of only 0.2% in the quarter from the previous three months, down from 0.4% in a previous estimate.

The protests have hit supply chains and dampened consumer sentiment. The retail sector was left reeling after protestors rampaged through central Paris on key pre-holiday shopping days.

The “yellow vest” revolt was inspired by planned fuel tax hikes – now put on hold – that protestors said would add to the cost of living at a time of weak wage growth.

Named after the fluorescent safety vests that all French motorists must carry in their cars, the movement’s protests have triggered some of the worst unrest seen in the capital since the 1968 student riots.

Europe’s top court makes Brexit ruling

The European Union’s top court ruled on Monday that the United Kingdom can unilaterally revoke its Brexit divorce notice, raising hopes among pro-EU Brits that the country could remain in the EU.

The decision comes about 36 hours before British lawmakers vote on a Brexit deal brokered by prime minister Theresa May and her EU counterparts.

May’s government says the ruling means nothing because it has no intention of reversing its decision to leave the EU on 29 March. But critics of her deal say it provides options either to delay Brexit and renegotiate the terms of withdrawal, or cancel it altogether if British voters change their minds.

A spokeswoman for the European Court of Justice said: “In today’s judgment, the Full Court has ruled that, when a Member State has notified the European Council of its intention to withdraw from the European Union, as the UK has done, that Member State is free to revoke unilaterally that notification.”


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With files from Reuters