Investment Managers Securities Analysts

Bermuda & Cayman

European Stock Markets

European Stock Markets

Source: Bloomberg
European equity markets mirrored the broad stock sell-off in the US.

European Markets

• On January 15 Carillion plc, the UK’s second largest construction company, went into liquidation and the stock was suspended from trading after emergency talks with the firm’s lenders and the government collapsed threatening 20,000 jobs in the UK and 43,000 worldwide. Carillion was involved in many public infrastructure projects – most notably the HS2 high speed rail line – and provided other vital public services such as cleaning and catering in NHS hospitals, the provisions of school dinners in nearly 900 schools, and prison maintenance. Carillion’s collapse was the result of mounting debts of around £1.5 billion and money lost on big contracts.

• On January 16 British energy giant BP plc said the company would take a $1.7 billion charge relating to the infamous 2010 Deepwater Horizon oil spill – pushing BP’s total Deepwater payouts above the $65 billion BP estimated the spill would cost. BP’s stock sold off by 2.7 percent on the day.

• On January 18 Airbus SE and Emirates reached an agreement in which Dubai-based airline will buy up to 36 more A380 superjumbo jets – rescuing production of the world’s largest commercial aircraft produced by Airbus. Emirates is biggest buyer of A380s since Airbus rolled out aircraft’s production a decade ago. As other airlines prefer Boeing’s smaller and (usually) more fuel-efficient Dreamliner and 777 models, Airbus said that without another big order from Emirates the company would be forced to stop producing the signature aircraft. Airbus rose 2.6 on the news.

• On February 2 Deutsche Bank AG, one of Europe’s largest banks, reported a net loss of €2.2 billion for Fourth Quarter 2017. The German lender cited a drop in investment banking revenues as well as tax changes in the US. The stock plunged 7.6 percent on the news.

• On March 4 the Italian public voted in the general elections which resulted in a hung parliament. The Italians voted for anti-establishment and far-right parties in higher numbers than before, meaning that none of the country’s three main parties will be able to govern Europe’s third-largest economy alone. Italian stocks sold off on the news with bank stocks hit the hardest – down 2.6 percent as measured by the Italian bank index.

• On March 5 the German Social Democratic Party decided to join the country’s conservatives in a coalition government that will be headed by Chancellor Angela Merkel reviving the grand coalition after months of political uncertainty. This is Angela Merkel’s fourth term as Chancellor of Germany. DAX, the German stock index, rose 1.5 percent on the news.