European stocks drifted lower on Monday as investors turned cautious on the region’s assets including bonds and the euro as their focus shifted to potential political risks.
In London, the FTSE 100 also closed in the red as election jitters and comments from European Central Bank (ECB) boss Mario Draghi weighed. The FTSE 100 ended the day down 0.2 per cent.
US stocks also slipped in early afternoon trading amid a lack of major catalysts, including economic data, and uncertainty over President Trump’s policies.
The Iseq fell close to 1 per cent. Bank of Ireland opened the morning in negative territory, and never recovered. It finished the session down 2.3 per cent as weakness weighed on some European banks following the ECB comments.
Ryanair fell 3.76 per cent, after it reported a weal revenue environment and said its third quarter profits had fallen by 8 per cent. It maintained a cautious outlook although its guidance remained unchanged.
Food company Glanbia fell 0.6 per cent, despite announcing the €181 million purchase of two nutrition businesses, Amazing Grass and Body & Fit.
Randgold Resources topped the FTSE 100, after reporting rising a 38 per cent jump in profits to £236.2 million in 12 months to the end of December, as record production levels and a drop in costs helped bolster performance.
Shares of Aer Lingus's parent, International Consolidated Airlines Group, fell 10.4p to 474.3p as British Airways cabin crew continued to strike over pay. Workers are expected to stage another three-day walkout from Thursday.
Mining stocks made gains on the back of the climbing gold price. Fresnillo edged higher by 19p to 1,488p, and Glencore rose marginally to 310.8p.
The biggest risers also included Mediclinic International up 15.5p to 804p, and Rolls-Royce Holdings up 9.5p to 680.5p.
As well as IAG, major fallers included Tesco down 4.25p to 193.05p, Royal Bank of Scotland down 4.6p to 223.9p, and Sainsbury down 4.8p at 260p.
Comments from ECB president Mr Draghi sparked losses in European markets. Mr Draghi, who appeared in front of legislators in Brussels, played down the recent climb in headline inflation, suggesting the bloc is still in need of stimulus including its existing bond purchases.
It sent the euro lower and bolstered the pound, which rose 0.25 per cent to €1.160.
In Italy, where equity markets are seen as among the most risky in Europe due mostly to its fragile banking sector, stocks badly underperformed.
Investors abandoned stocks ahead of key leadership elections in Germany and France, which could shake up the political status quo. France’s CAC 40 dropped 1 per cent in its largest decline in a week. The German Dax dropped 1.2 per cent.
Shares in automakers across Europe underperformed, with the sector index falling 1.4 per cent. Bank of America Merrill Lynch equity strategists downgraded the sector to underweight, saying the recent rally looks stretched and the group faces structural challenges.
By the afternoon, 10 of the 11 major S&P sectors were lower, with the energy index’s 0.91 per cent fall leading the decliners. Oil fell more than 1 per cent as a stronger dollar, ample US supplies and excess speculative length outweighed OPEC output curbs and rising tensions between the United States and Iran.
Microsoft's 0.52 per cent fall weighed the most on the S&P and the Nasdaq. Hasbro jumped as much as 16.6 per cent to a record high of $96.34 after the toymaker's quarterly results beat expectations. The stock provided one of the biggest boost to the Nasdaq.
Tyson Foods fell 3.2 per cent to $63.34 after the nation's biggest chicken processor disclosed it had received a subpoena from US authorities that was likely linked to price fixing.
Tiffany fell 2.8 per cent to $78.21 as the upscale jeweller said its chief executive had stepped down after what the company called disappointing financial results.
(Additional reporting: Reuters/PA/Bloomberg)