Watch: Overseas markets lower as Brexit talks begin
Fresh Brexit talks begin on Tuesday with a more conciliatory tone as European negotiators have reportedly dropped their demand for the two sides to reach a broad agreement on all previously disputed outstanding areas.
In return, the UK is expected to “engage in detailed discussions on post-Brexit fishing quotas and the government’s future subsidy policy, two of the biggest remaining sticking points,” according to The Times.
“This is potentially a significant move,” said Deutsche Bank analysts in their Tuesday morning report.
COVID-19 also remains in the spotlight as infections rates continue to rise. The official toll from the virus has passed one million deaths, yet health officials say the true toll could be higher given the difficulty in accurately quantifying cases.
“After further dividend cuts and reductions in analysts’ estimates, FTSE 100 dividend payments are forecast to fall 24%, or £18bn ($23.1bn), in 2020 after an 11% drop in 2019, leaving the total at its lowest level since 2012,” said Russ Mould, investment director at AJ Bell. “That means the FTSE 100 is currently expected to yield 3.5% for 2020, increasing to 4.2% in 2021.
At market close in London, London’s FTSE 100 (^FTSE) was off 0.4%. The pan-European STOXX 600 (^STOXX) was down 0.5%. Germany’s DAX (^GDAXI) slumped by 0.4%, and France’s CAC 40 (^FCHI) went lower by 0.3%.
Markets are heavily focused on the first US presidential debate between president Donald Trump and Democratic presidential candidate Joe Biden that takes place at 21:00 ET on Tuesday.
Talk of a fiscal stimulus in the US also helped equities on Monday, after House Speaker Nancy Pelosi told CNN that House Democrats could see a deal happening.
Watch: What is a no-deal Brexit and what are the potential consequences of it?
“Globally, a loss of momentum and the renewed rise in COVID-19 infection rates points to the need for additional fiscal and monetary support,” said analysts at ANZ Bank in a note.
“That policy outlook is continuing to provide a supportive backdrop to equities despite recent volatility.”
Asian markets opened higher overall but had mixed performance on Tuesday, following signs of a recovery in US markets after last week’s massive selloff.