European stocks followed Asian equities lower Monday on reports that China could stop propping up its equity markets.
Germany’s DAX traded over 1.3 percent lower and the French CAC 40 declined over 1.2 percent. London’s FTSE 100 was closed on Monday due to a public holiday. Italy’s FTSE MIB was trading 0.8 percent lower.
This came after China’s Shanghai Composite fell more than 3 percent in intraday trading and other Asian equity indices fell into negative territory on a report in the Financial Times that Beijing had ended the large-scale share purchase program that it was using to support the market.
Beijing may now switch its focus from intervention to stopping those it believes are “destabilizing the market,” the FT reported.
U.S. stock index futures slid on the reports, but pared losses in line with the Shanghai Composite, which closed down 0.8 percent.
Comments from Federal Reserve Vice Chairman Stanley Fischer regarding the likelihood of a September interest rate hike in the U.S. has also weighed on investor sentiment. Speaking to CNBC on Friday, Fischer said it was too early to determine whether recent market turmoil had made a September rate hike more or less compelling.
Stocks to watch
Shares in Italian energy firm ENI surged over 4 percent on Monday after the company said it had discovered potentially one of the world’s largest natural-gas fields off the Egyptian coast.
After a rally last week, oil was on the back foot on Monday with Brent and WTI crude both trading lower.
As a result, a number of energy and oil companies were in the red. German firm RWE was over 3.5 percent lower and E.ON was off by 2.5 percent. Total and Repsol were both in negative territory.
Meanwhile, Maersk Oil has received approval by U.K. authorities to develop the largest gas field discovered in the North Sea in more than a decade. Shares in Denmark’s Moller-Maersk were off by around 0.2 percent.
In data news, euro zone August inflation came in at 0.2 percent, unchanged from the previous month.
Source: CNBC
