European Stocks Mixed After US Government Shutdown

Major European stocks started the trading session mixed on Tuesday, following the first US government shutdown since 1996.

The US government faced its first shutdown after the government failed to finalize an agreement over the largest economy’s budged spending bill by the deadline given, which was on Monday midnight.

The Euro Stoxx 50 advanced 0.41% higher, opening at 2,900.56, while the German DAX edged up 0.37% higher at 8,626.54 at the open. At the same time the French CAC 40 rose 0.29% at 4,156.87, while the British FTSE 100 declined 0.09% to 6,458 at the open.

A series of Purchasing Managers’ Index (PMI) are expected to be released from Italy, Spain, UK, Germany, France and the eurozone as a whole, between 7:15am GMT and 8:30am GMT.

First US government shutdown

The House Republicans and Senate Democrats tried to reach a temporary agreement for the government budget spending bill before the deadline on Monday midnight, to delay the affordable care act as the US senate aimed for a fresh bill to continue funding the government after Monday.

Over 500,000 federal employees are expected to be out of work without pay, while other government services will be closed for the day.

“You don’t get to extract a ransom for doing your job, for doing what you’re supposed to be doing anyway or just because there’s a law there you don’t like,” Obama said at the White House on Monday. “Time’s running out,” he added.

According to economists, the shutdown could wipe out up to 1.4 percentage points from the fourth-quarter of the US economic growth rate.

Italy’s Turmoil

The ongoing political turmoil in Italy has worsened over the weekend after five ministers from the former Prime Minister Silvio Berlusconi’s party withdrew from the cabinet. Analysts warned that the crises could stir up a new election.

Five Ministers from Berlusconi’s People of Freedom (PDL) party resigned on Saturday, as the party’s leader opposed plans to increase sales tax.

 

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