European Stocks Led Lower by Declines in Commodities Stocks

November 23, 2015

London (Nov 23)  European stocks opened the week in the red, led by declines in commodities stocks on falling raw materials prices. Playtech fell in London as regulatory issues derailed its deal with Plus500 Ltd.

In London, the FTSE slid 0.52% to 6,301.90, while in Paris the CAC 40 was down 0.64% at 4,879.30, and in Frankfurt the DAX was 0.28% lower at 11,088.46.

Meanwhile in Brussels, the BEL20 index was little changed at midday local time, as the Belgian and EU capital remained on lockdown for a third day, with schools, shopping centers, and the subway system all closed amid warnings of a "serious and imminent" terrorist attack risk. The country remained on high alert after the Belgian government over the weekend raised the terror threat for Brussels to the highest level, with the next security update due out later in the day.

Falling prices in nickel and other metals weighted on commodities stocks, with BHP Billiton (BHP) down 1.37%, Anglo American (AAUKY)  1.3% lower and Glencore (GLNCY)  sliding 0.89% in London.

Slumping crude oil prices weighed on energy stocks including BG Group (BRGYY) , down 1.03%, and Royal Dutch Shell (RDS.A - Get Report)  0.76% lower.

Investors, however, failed to be swayed by an upbeat report from Markit Economics, whose preliminary Purchasing Managers Index for the eurozone rose to 54.4 in November from 53.9 the previous month, indicating the fastest rate of output expansion since May 2011. Growth in Germany accelerated to three-month high, fueled by the biggest monthly improvement in new business for two years, while France experienced the slowest rate of business activity amid weaker service sector growth. Manufacturing output growth in France also slowed despite a slight pickup in new orders.

In London, Playtech slumped 9.2% after the Israel-based betting software maker pulled the plug on its planned takeover of Plus500 Ltd., also of Israel, amid a stalemate with U.K. regulators over concessions.

Playtech said it will not incur any financial penalties as a result of calling off the deal, and that it has no immediate plans for its existing 9.9% stake in Plus500.

Regulatory turbulence also hit a planned merger of annuities specialists Just Retirement Group, whose shares were down 1.46%, and Partnership Assurance, whose shares declined 1.31%.

The companies are now targeting a January 2016 merger completion vote, subject to regulatory approval, after Just Retirement delayed publication of a shareholder circular and Partnership Assurance postponed a shareholder vote on the deal.

As previously scheduled, Just Retirement will hold its annual general meeting starting at noon local time Monday.

In Frankfurt, Wincor Nixdorf (WNXDY) was 0.21% lower, following an agreement to be acquired by Canton, Ohio-based ATM maker Diebold (DBD - Get Report)  for about €1.8 billion ($1.9 billon) in a deal that will crate the world's leading maker of cash machines and security systems.

Among risers, Home Retail Group gained 6.58% following a Sunday Times report that private-equity buyers are considering a bid for the U.K. home-improvement retailer.

In Paris, shares of information technology firm Gfi Informatique were suspended from trading after it received a takeover offer from Qatar-based automaker Mannai Corp. Mannai has agreed to buy a 51% stake from Apax Partners and Boussard and Gavaudan, in a bid valuing the target at $596 million.

Asian markets were mixed, with the Nikkei adding 0.10% in Tokyo to 18,879.81 and the Hang Seng erasing 0.39% in Hong Kong to 22,665.90.

Soiurce: TheStreet

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