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UPDATE 2-Brexit worries pressure London shares, Europe steady

Published 24/09/2019, 17:11
© Reuters.  UPDATE 2-Brexit worries pressure London shares, Europe steady
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(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* FTSE 100 down 0.5%
* Supreme Court rules UK PM's parliament suspension unlawful
* European travel stocks extend gains on Thomas Cook
collapse
* Healthcare, utilities rally

(Adds fresh comments, updates to prices to close)
By Susan Mathew
Sept 24 (Reuters) - European shares closed little changed on
Tuesday on persistent growth worries and as London stocks
succumbed to heightened Brexit uncertainty after the Supreme
Court ruled that the British prime minister's suspension of
parliament was unlawful.
The pound GBP= rallied as the Court's decision was seen as
reducing the probability of Britain leaving the European Union
without a divorce deal or possibly delaying Brexit. GBP/
The currency's rally saw the FTSE 100 .FTSE give up 0.5%
as firms that earn much of their revenue in dollars fell. More
domestically focused stocks .FTMC also declined 0.6%, showing
deeper Brexit malaise among investors. .L Opposition leaders called on Prime Minister Boris Johnson to
resign, but a source in his office said he would not do so and
remained committed to delivering Brexit on Oct. 31.
"We put the chances of a (Brexit) deal at just 10%, a no
deal at some point at 40%, more delays at 45% and remain (in the
EU) at 5%," said Paul Dales, chief UK Economist at Capital
Economics.
"What we do know is that the performance of the UK economy
will remain below-par until it is resolved."
Euro zone stocks .STOXXE and the broader STOXX 600 index
.STOXX both closed steady, giving up meagre gains as
disappointing U.S. consumer confidence was the latest in a raft
of poor economic data. .N
After dismal data from Germany and across the euro zone had
dented sentiment on Monday, a slight rise in German business
morale did little to calm investor nerves as the Ifo economic
institute said Europe's largest economy is still likely slipping
into recession. "(The German data) does not take away the fact that the
German industry continues to suffer from structural changes and
the ongoing trade conflict," said Carsten Brzesk, chief
economist at ING Germany.
"While a "light" technical recession is not the end of the
world for an economy... it is the lack of any signals of an
imminent rebound which is more concerning."
Investors bought into sectors perceived as defensive plays
such as healthcare .SXDP , food and beverages .SX3P and
utilities - commonly considered as industries where demand and
results hold up relatively better when economic growth slows.
Travel and leisure saw a 1.2% jump, the largest of any
sector, as airlines and travel operators rose on expectations
that they will pick up lost business from British travel giant
Thomas Cook TCG.L following its collapse on Monday.
TUI TUIT.L jumped 6.5% to top the main index, while
Deutsche Lufthansa LHAG.DE , Ryanair Holdings RYA.I and
EasyJet EZJ.L gained between 1% and 2%.
Belgian materials and technology group Umicore UMI.BR
rallied 5.8% after it partnered with LG Chem 051910.KS for a
cathode material supply deal. Falling iron ore prices hurt miners such as BHP BHPB.L and
Rio Tinto RIO.L , while lower oil prices hit oil stocks
.SXEP . IRONORE/ O/R
The eurozone banking index .SX7E and auto stocks .SXAP
continued their slide after Monday's business activity readings.

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