- STOXX down 0.1 pct
- WPP opens sharply lower after Sorrell quits
- Whitbread rallies after activist move
- Russian-exposed stocks underperform
European shares steadied on Monday as investors expected there would be no immediate military escalation in Syria following the weekend’s American-led strike.
Trading however remained cautious as tensions between Western powers and Russia persisted and markets braced for new U.S. sanctions on Russia over its continued support of Syrian President Bashar-al Assad.
“The subdued nature of the (market) response may however be tested with U.S. Treasury Secretary (Steven) Mnuchin expected to announce additional Russian sanctions on Monday,” said Rabobank strategists in a note.
The pan-regional STOXX 600 index was down 0.1 percent by 0832 GMT, while among otherEuropean benchmarks, the FTSE was down 0.2 and Germany’s DAX was flat.
Over the weekend, the United States, France and Britain launched 105 missiles targeting what the Pentagon said were three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma.
On the corporate front, shares in advertising group WPP fell as much as 5.3 percent after chief executive and founder Martin Sorrell quit, leaving the group without a boss at a time of huge change in the industry
“The fact is that there is a lot of uncertainty ahead. It is not clear whether the current margin targets or dividend payout will survive management change,” said Citi analyst Thomas Singlehurst, who however reiterated his buy rating on the stock, citing the company’s current depressed valuation.
WPP shares, which have already fallen 30 percent this year, pared part of their losses and were down 2.1 percent. Analysts and peers have speculated that the group of 200,000 people could be broken up without Sorrell at the helm.
Top STOXX gainer was Whitbread, up 6.2 percent after U.S. activist investor Elliott Management said it now held the largest stake in the coffee-shop and hotel operator.
Software AG was among the leading fallers, down 4.4 percent. Traders said the fall was due to weaker-than-expected quarterly revenues at its Digital Business Platform business.
As investors awaited the new sanctions on Russia, which a U.S. diplomat said would target companies that were dealing with equipment related to Assad and chemical weapons use, shares in some Russian exposed companies underperformed.
Precious metals miner Polymetal fell 4.1 percent, underperforming its peers, miner Evraz fell 2.4 percent, while Austrian lender Raiffeisen Bank declined 1.9 percent.
Swiss pumpmaker Sulzer, which was last week freed from U.S. sanctions related to its Russian investor Viktor Vekselberg, slipped 0.3 percent. Over the weekend Sulzer said its business was “fully back to normal” after it received a second license fully unblocking its assets.