By Carla Mozee, MarketWatch
Pound drops to $1.2515 ahead of unscheduled statement by U.K.'s prime minister
European stocks were in selloff mode Tuesday, with commodity shares struggling and investors nervous ahead of the first round of voting in France's presidential election on Sunday.
U.K. stocks contributed to the slide, holding to losses following news of an unscheduled statement to be made by U.K. Prime Minister Theresa May.
The Stoxx Europe 600 index declined 0.6% to 378.44. No sector moved higher, and oil and gas and basic materials groups were losing the most, FactSet data showed. Trading was closed Monday for the Easter holiday. Last week, which was shortened by the Good Friday holiday, the regional benchmark fell 0.2%, its first pullback in three weeks.
Miners: Tuesday's session saw European mining shares shoved lower as iron ore prices slumped to their lowest in five months on concerns stemming from China. The world's second-largest economy over the weekend posted first-quarter gross domestic product of 6.9% , the fastest rate of growth since 2015.
"Though headline activity was robust, we see signs that growth may be peaking," said UBS economist Donna Kwok in a research note. "Despite property activity's rally in Q1, real property investment was not as strong and has in fact been losing momentum since the start of 2017."
Investors in mining shares watch developments in the Chinese property market as the country is a major buyer of precious and industrial metals. The Stoxx Europe 600 Basic Resources index stumbled 2.4% on Tuesday.
"March's mixed import data also supported our view that while Chinese domestic demand remains resilient, its momentum may be approaching if not already peaked," said Kwok.
Among miners, steel producer ArcelorMittal (>> ArcelorMittal SA) sank 5%, Tenaris SA (>> Tenaris SA) fell 3%, Antofagasta PLC (>> Antofagasta plc) fell 3.2% and Glencore PLC (>> Glencore PLC) moved down 2.9%.
Losses for Antofagasta and Glencore weighed on the U.K.'s FTSE 100 , which fell 1.1%.
The index remained lower following news that U.K. Prime Minister Theresa May will make a statement at 11:15 a.m. London time, or 6:15 a.m. The pound fell to an intraday low of $1.2515 ahead of her statement.
France: In Paris, the CAC 40 slid 1.1% to 5,017.64, with only Air Liquide (>> Air Liquide) clinging to a slim gain. The move comes ahead of Sunday's first vote in the country's presidential election.
"The difference of votes between the 4 [leading] candidates is less than 3% which poses more uncertainty to the election," said FXPro technical analyst Devata Tseng in a note.
"While the latest odds still give independent Emmanuel Macron a healthy chance of winning in May, his odds have fallen as those of [conservative François] Fillon and far-left candidate Melenchon have surged," wrote Kathleen Brooks, research director at City Index.
"If we get a Macron/Fillon second round runoff, this is likely to be considered 'market friendly', triggering a rally in the euro, the CAC, but also in the German DAX and Eurostoxx index, which have had decent correlations with the French bond yield this year," she said.
The euro was buying $1.0656, compared with $1.0644 late Monday in New York.
In Frankfurt, the DAX 30 index fell 0.4% to 12,058.38.