Europe: FTSE 100 flat as Brexit worries weigh on pound; Broader Europe slips

[BENGALURU] A battered pound on growing fears of Brexit without a trade deal buoyed London's blue-chip index on Monday, while other major European indexes slipped as rising tension between the United States and China sapped appetite for risky assets.

London's mid-caps index lost over 1 per cent, while the blue-chip index closed up 0.1 per cent after gaining as much as 0.8 per cent in the session.

The FTSE 100 outperformed regional peers, thanks to a hammered pound as Brexit negotiators struggled over differences on fishing rights, fair competition and ways to solve future disputes.

The United Kingdom said it would not extend the Dec 31 deadline to leave the bloc, and that it is prepared for an exit without a trade deal. All eyes were on the outcome of a call at 4pm GMT between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen.

"The true deadline (for a deal) will likely be at some point at the end of this week, which could mean a week full of drama,"said Edward Moya, senior market analyst at Oanda in New York.

Failure to secure a deal would clog borders, upset financial markets and disrupt delicate supply chains across Europe and beyond. Fitch on Monday said a no-deal scenario would have more severe impact on UK's GDP than expected.

After adding about 14 per cent over the last five weeks, the pan-European Stoxx 600 index fell up to 1 per cent before closing down 0.3 per cent.

Sentiment was dulled also by worries over US-China relations after Reuters reported that United States was preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing's disqualification of elected opposition legislators in Hong Kong.

The news cast a shadow on data that showed German industrial output rose much more than expected in October. Adding to the gloom, the Ifo institute said production expectations for Europe's largest economy have deteriorated for the coming months.

Germany's trade-sensitive DAX index lost 0.2 per cent.

Banks led losses in Europe as eurozone bonds yields fell. Finance-heavy indexes in Spain and Italy slipped more than 0.5 per cent, while France's CAC 40 fell 0.6 per cent after scaling a more than nine-month high on Friday.

Limiting losses, tech stocks added 0.4 per cent.

Oil stocks slipped 0.4 per cent. A continued surge in coronavirus cases globally pressured crude prices as it forced a series of renewed lockdowns.

Investors also await the outcome of a European Central Bank meeting on Thursday, with more emergency bond buying and cheap liquidity for banks eyed.

REUTERS