GERMANY (OBSERVATORY) – European stocks fell on Monday as investors awaited new US sanctions on Russia, but losses were limited as the market expected there would be no immediate military escalation in Syria following the US-led air strike over the weekend.
Trading remains cautious as tensions between Western powers and Russia continue and markets prepare for new US sanctions on Moscow for its continued support for Syrian President Bashar al-Assad.
“The market reaction to economic sanctions is stronger (than its response to air strikes) because certain assets are directly affected,” said Paul Donovan, chief economist at UBS.
The Stoxx 600 European session ended the trading session down 0.4 percent. In Europe’s main bourses, the Financial Times fell 0.9 percent and the German DAX 0.4 percent.
Shares of companies with exposure to Russia were hurt as investors waited for new sanctions on Moscow, which a US diplomat said would target companies dealing with equipment linked to Assad and the use of chemical weapons.
In other sectors, shares were affected by changes in management and news of mergers or acquisitions.
Shares in WBP fell 6.1 percent after its chief executive and founder Martin Sorrell resigned, leaving the group without a president at a time when the sector is undergoing major changes.
Volkswagen fell 2.9 percent after Germany’s automaker said it was open to buying a majority stake in US-based truck maker Navistar.
Software maker AIG fell 6.1 percent to be among the biggest losers. Traders said the decline was due to weaker-than-expected quarterly revenues for their digital activities.
Among the shares that broke the market, Amsterdam-based Altis Communications rose 5.4 percent after a report that France’s Zweig Group was considering offering to acquire the Altis unit in France with other investors.