European Markets Close Weak On Concerns Over Brexit, U.S. Stimulus Deal Uncertainty

(RTTNews) - European markets ended weak on Friday after a cautious session amid uncertainties over Brexit, stalled U.S. stimulus talks and worries over surging coronavirus cases.

After months-long talks and with just three weeks to go until the end of the transition period, British Prime Minister Boris Johnson said there is now a "strong possibility" the U.K. will leave the EU without a deal.

European Commission President Ursula von der Leyen also said there was a "higher probability for no deal than deal."

Due to record daily increases in coronavirus cases, Germany is reportedly looking at imposing tougher lockdown measures.

Meanwhile, EU leaders have reached an agreement to unblock the EU's €1.8 trillion financial package following Hungary and Poland lifting their objections.

The pan European Stoxx 600 declined 0.77%. The U.K.'s FTSE 100 ended lower by 0.8%, Germany's DAX tumbled 1.36% and France's CAC 40 slid 0.76%, while Switzerland's SMI edged down 0.04%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended notably lower, while Denmark, Greece, Russia and Turkey closed higher.

In the UK market, Rolls-Royce Holdings tumbled nearly 8% The aircraft engine maker said it expects to end 2020 with net debt of £1.5-£2.0bn after a cash outflow of £4.2bn during the year.

Natwest Group shares plunged 6.7%. Lloyds Banking Group, JD Sports Fashion, Barclays, IAG, Next, Antofagasta, Royal Dutch Shell, British Land, BP, Tesco and BT Group lost 3 to 4.5%.

Among the gainers, Spirax-Sarco Engineering, Burberry Group, Bunzl, Scottish Mortgage, Polymetal International, Avast, Croda International and Just Eat Takeaway gained 1 to 2.2%.

In France, Orange, Sanofi, Technip, Renault, Societe Generale, Cap Gemini and Valeo lost 2 to 4%. Accor, Peugeot, AXA, Airbus Group and ArcelorMittal also ended notably lower.

On the other hand, WorldLine surged up more than 4%. Safran, Unibail Rodamco, Dassault Systemes, Vivendi and Publicis Groupe also ended on positive note.

In the German market, Deutsche Bank, E.ON, Allianz, Volkswagen, Wirecard, Munich RE, Deutsche Telekom and Bayer were among the prominent losers.

In economic news, final data from Destatis showed German consumer prices fell 0.3% year-on-year in November, sliding for the third straight month, following declines of 0.2% each in both September and October. The rate came in line with the estimate published on November 30.

The last time an inflation rate as low as this was observed was in January 2015. The major reason for the latest negative rates was caused by the temporary value added tax reduction implemented in July 2020.

On a monthly basis, consumer prices decreased 0.8% in November, as initially estimated, after a 0.2% drop in October.

According to the Bundesbank's latest projections, the inflation rate in 2020 will go down significantly to 0.4%. Prices are expected to rise by 1.8% next year despite the still subdued underlying trend.

Bundesbank said in its semi-annual report that the German economy is set to log a less severe contraction this year as the easing of Covid-19 containment measures boosted the third quarter growth. It projects a 5.5% contraction this year instead of a 7.1% shrink it projected in June.

The bank expects strong economic growth of 3% and 4.5% for 2021 and 2022. But these rates were smaller than the earlier forecast of 3.2% and 3.8% for 2021 and 2022, respectively.