By Victor Reklaitis, MarketWatch
Software stock Micro Focus loses roughly half its value after
CEO exits
European stocks finished down sharply Monday, extending last
week's pullback, as analysts attributed the retreat in part to
persistent worries about a global trade war.
Micro Focus International PLC's stock led the way lower, after
the British software maker warned on its outlook and said its CEO
has resigned.
The U.S. Federal Reserve's upcoming policy decision also was
viewed as helping to peel away investors from equities worldwide,
as was Monday's selloff on Wall Street.
How markets are moving
The Stoxx Europe 600 index fell 1.1% to end at 373.68. The
pan-European equity gauge gave up 0.8% last week, having erased
part of its weekly loss by gaining modestly on Thursday and
Friday.
The Stoxx 600 is down 1.6% in March and lower by 4% so far in
2018.
Germany's DAX 30 shed 1.4% to finish at 12,217.02, and France's
CAC 40 index lost 1.1% to close at 5,222.84. The U.K.'s FTSE 100
index dropped 1.7% to end at 7,042.93.
The euro bought $1.2235, up from $1.2291 late Friday in New
York.
The pound jumped above $1.40
(http://www.marketwatch.com/story/pound-roars-back-above-140-after-eu-agrees-to-brexit-transition-deal-2018-03-19)
and was recently at $1.4042 after the European Union agreed on the
broad terms of a two-year transition period
(http://www.marketwatch.com/story/eu-agrees-on-two-year-brexit-transition-deal-2018-03-19)
for the U.K. when Brexit kicks in next year.
Check out:Pound could surge in 'frenetic' week of Brexit and BOE
news, ING says
(http://www.marketwatch.com/story/pound-could-surge-in-frenetic-week-of-brexit-and-boe-news-ing-says-2018-03-16)
What's driving markets
Investors have been worrying this month about a potential global
trade war, and central banks have the attention of markets as well,
with a Fed decision on Wednesday. The trade concerns come as the
Trump administration takes a hawkish stance on U.S. trade with
China and moves ahead with tariffs on foreign steel and
aluminum.
Read: U.S. soybeans would be China's biggest weapon in a trade
war
(http://www.marketwatch.com/story/us-soybeans-would-be-chinas-biggest-weapon-in-trade-war-2018-03-17)
And see:Trump's most market-rattling trade blasts are still to
come, warns Pimco
(http://www.marketwatch.com/story/trumps-most-market-rattling-trade-blasts-are-still-to-come-warns-pimco-2018-03-16)
Investors worldwide watch Fed rate policy, as higher American
interest rates can make riskier assets such as stocks less
attractive -- and because many companies do business in the word's
largest economy.
U.S. stocks were down sharply about midway through their session
Monday
(http://www.marketwatch.com/story/dow-futures-slide-more-than-100-points-as-facebook-fall-leads-us-stocks-lower-2018-03-19),
with Facebook Inc. shares (FB) helping to lead the way lower as the
social-media giant drew considerable flak
(http://www.marketwatch.com/story/facebook-sparks-international-furor-over-third-party-access-to-user-data-2018-03-18)
for how it had managed users' data.
What strategists are saying
"There is an air of caution in financial markets to start the
week as traders look ahead to some key issues in the days ahead,"
said Richard Perry, Hantec Markets analyst.
"Fears over trade tariffs and protectionism are never far away,
whilst the Federal Reserve may be about to signal that an
acceleration in its tightening program could be ahead," he said in
a note.
Don't miss: What to expect from the new Fed dot plot on interest
rates
(http://www.marketwatch.com/story/what-to-expect-from-the-new-fed-dot-plot-on-interest-rates-2018-03-16)
And read:It's time for stock-market investors to refocus on the
Fed
(http://www.marketwatch.com/story/now-its-time-for-the-stock-market-to-refocus-on-the-fed-2018-03-16)
Stocks in focus
Micro Focus shares (MCRO.LN) dived 46% for the Stoxx Europe
600's biggest drop, and they had been down more than 50% during the
session. The move came after the software company said CEO Chris
Hsu has resigned and warned that revenue for fiscal 2018
(http://www.marketwatch.com/story/micro-focus-shares-slump-on-ceo-exit-revenue-warning-2018-03-19)
will fall more than previously anticipated.
Hammerson PLC shares (HMSO.LN) soared 24% for the Stoxx 600's
largest gain after the U.K. mall owner drew and rejected a 4.9
billion-pound ($6.9 billion) takeover offer
(http://www.marketwatch.com/story/klepierre-makes-49-bln-hammerson-takeover-step-2018-03-19)
from French real-estate investment company Klepierre SA.
Klepierre's stock (LI.FR) fell 3.9%.
Check out:This surging stock looks like a promising bet on
electric cars -- and it's not Tesla
(http://www.marketwatch.com/story/this-surging-stock-looks-like-a-promising-bet-on-electric-cars-and-its-not-tesla-2018-03-17)
William Hill PLC shares (WMH.LN) rose 4.2% along with other
British gambling companies as a U.K. government crackdown on a key
business -- fixed-odds betting terminals -- looked like it could be
less drastic than feared.
A commission is "recommending maximum stakes on fixed-odds
betting terminals should be cut to GBP30, not the GBP2 as feared,"
said Neil Wilson, ETX Capital's senior market analyst, in a note.
"This should be a relief for the sector as the worst-case scenario
looks to have been avoided."
Barclays PLC (BCS)(BCS) tacked on 3.6% after the British bank
said activist shareholder Sherborne Investors Management LP has
acquired a 5.2% stake
(http://www.marketwatch.com/story/barclays-activist-sherborne-has-taken-52-stake-2018-03-19).
Melrose Industries PLC (MRO.LN) on Monday lowered the acceptance
condition for its hostile 8.1 billion-pound ($11.3 billion) offer
for GKN PLC (GKN.LN) and said it will pay up to GBP1 billion into
GKN's pension scheme over the period of ownership. GKN's stock
closed down 0.6%, while Melrose dropped 0.7%.
(END) Dow Jones Newswires
March 19, 2018 13:24 ET (17:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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