Major European stock indexes fell on Thursday after the resignation of Brexit Minister Dominique Raab, raising pressure on British Prime Minister Theresa May. The Stoxx 600 European index fell by more than 1.3%, and all major indexes were in the red zone amid the drop in GBP.
Dominique Raab, in a letter to Teresa May, said he could not come to terms with the proposed Brexit deal, especially after the promises made by the country’s ruling Conservative Party in an election statement last year.
In the middle of today’s trading session, the pound was down 1.5% after the news, to just under $1.28. Financial stocks in the UK also fell after the news of Raab’s resignation hit the markets. The Royal Bank of Scotland (RBS) fell 10%, its worst drop since Britain’s decision to exit the EU in June 2016. Lloyds stocks fell 5.8% and Barclays Bank fell nearly 5%.
UK house builder stocks continued their losses, with Barratt down 8.2%, Taylor Wimpey down 9% and Persimon down 9%.
Trade talks between the United States and China
Leaving the Brexit aside, shares in Asia have seen market sentiment improve on reports that China has provided a written response to US trade proposals. US government sources told Reuters on Wednesday that China had sent a response to US demands on the current trade negotiations, giving investors hope that the two sides could end their global trade dispute.
Concerns about oversupply in oil markets continue to dominate investor sentiment. On Thursday, oil prices fell amid concerns about rising supply and falling demand for crude. Brent crude was priced at $65.88 a barrel, down 24 cents, or 0.4 percent from the previous closing price, while WTI was sitting at $55.96 a barrel, down 28 cents or 0.5 percent.
In the United States, the Dow Jones Industrial Average fell more than 100 points at the opening of daily sessions as Amazon and Walmart saw losses.
The broader Standard & Poor’s 500 Index (.SPX) was down 0.4% after just a few hours from the start of trading session, as energy and utilities fell more than 1%. The Nasdaq Composite Index traded flat with Amazon falling 1.3% and Facebook falling 0.8%.
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