Europe opens lower amid political uncertainty
European markets started a soggy session on Friday amid intensifying political uncertainty on the continent following the French president François Hollande's announcement last night that he will not be seeking re-election. The upcoming constitutional referendum in Italy is also causing worries as investors think a "no" vote might result in fresh elections and complicate the recapitalization process of Italy's troubled lenders.
The Italian FTSE MIB index shed 0.64% on the opening bell, dragged down by losses in financials. UBI Banca plunged 2.19%, while Banco Popolare dropped 1.8%. The CAC 40 in Paris fell 0.78%.
In London, the FTSE 100 opened 0.82% in the red. Rio Tinto plc led the decliners with a 2.18% loss, as the mining giant is under investigation by the United States Securities and Exchange Commission over an impairment booked against its Mozambique operations four years ago.
The German DAX was 0.95% off at 9:05 a.m. CET on declines in the tech sector.
The British pound outperformed this morning, boosted by dollar weakness and news that the pro-European Liberal Democrat Sarah Olney won a by-election in Richmond Park. The currency advanced 0.27% against the U.S. dollar to go for 1.2626 at 9:12 a.m. CET and 0.17% versus the euro, changing hands at 1.1831.