European stocks lower; Brenntag slumps over acquisition talk

By Peter Nurse 

Investing.com - European stock markets traded lower after a series of protests in China over the weekend, against strict mobility restrictions to combat the country’s ongoing COVID outbreak, hit sentiment and threatened to weigh on economic activity.

At 03:45 ET (08:45 GMT), the DAX index in Germany traded 0.4% lower, CAC 40 in France traded down 0.5% and the FTSE 100 in the U.K. fell 0.7%.

Rare, widespread protests occurred across China over the weekend as the populace rebelled against strict coronavirus curbs put in place as COVID-19 infections hit a fifth daily record.

The wave of civil disobedience stems from frustration over the country’s zero-COVID policy nearly three years into the pandemic, especially as restrictions had become less onerous earlier this month, raising hopes of a full reopening.

The Chinese economy is the second largest in the world and a major export market for European companies. 

Investors will also be listening to a speech by ECB President Christine Lagarde at the European Parliament later Monday, ahead of Wednesday's release of Eurozone inflation data.

Inflation in the Eurozone soared to 10.6% in October, more than five times the European Central Bank's 2% target. The ECB has increased rates by a record 75 basis points at its last two meetings, but uncertainty exists whether the central bank will hike by 50 or 75 basis points at the Dec. 15 meeting.

In corporate news, Brenntag (ETR:BNRGn) stock slumped over 10% after the German chemicals distribution company announced over the weekend that it held preliminary discussions with U.S. rival Univar Solutions (NYSE:UNVR) over a potential acquisition.

Superdry (LON:SDRY) stock fell 1.1%, failing to hold on to early gains after the U.K. fashion group confirmed weekend press reports that it is in talks with a hedge fund backed by Elliott Management to refinance a crucial debt facility.

Crude oil prices slumped Monday, as the rising COVID-19 cases in China, the world’s top crude importer, and the protests over the country’s strict mobility restrictions are likely to hit demand from the crucial source.

On the supply side, Group of Seven and European Union officials have been unable to agree on a level of a price cap on Russian oil, following initial discussions of between $65 and $70 a barrel.

The price cap is due to come into effect on Dec. 5 when an EU ban on Russian crude kicks off.

That’s the day after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are scheduled to next meet to discuss future output levels.

By 03:45 ET, U.S. crude futures traded 2.8% lower at $74.14 a barrel, while the Brent contract fell 2.8% to $81.38. The U.S. contract fell to its lowest since late December, 2021, while the Brent contract dropped to its lowest since Jan. 11.

Additionally, gold futures rose 0.2% to $1,757.55/oz, while EUR/USD traded 0.3% higher at 1.0423.