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European stocks sink more than 1 percent amid Brexit resignations; sterling tumbles

An anti-Brexit demonstrator hold placards opposite the Houses of Parliament, in London, Britain, November 13, 2018.

European stock indexes slipped on Thursday after U.K. Brexit minister Dominic Raab resigned from his post, piling yet more pressure on U.K. Prime Minister Theresa May.

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The pan-European Stoxx 600 was down more than 1.2 percent, with all major indexes in the red amid the plunge for the pound.

Raab, in a letter to the U.K leader, said he could not reconcile with the terms of her proposed Brexit deal, after the promises the ruling Conservative Party made to the country in an election manifesto last year. Sterling plunged more than 1 percent on the news to trade at $1.28 levels. However this helped some heavily-capitalized FTSE stocks which collect revenues in dollars.

But U.K. financial stocks slumped on the news of Raab's resignation. Capita was down nearly 12 percent, followed by RBS down 10 percent - it's worst since the Brexit vote in June 2016 and Barclays down more than 6 percent. U.K. housebuilder stocks extended losses with Barratt Developments down 7.8 percent, Taylor Wimpey down 9 percent and Persimmon down over 9 percent.

US-China trade talks

Aside from Brexit, stocks in Asia saw market sentiment improve on reports that China has delivered a written response to U.S. trade demands. U.S. government sources told Reuters on Wednesday that China had sent a response to U.S. demands on the ongoing trade negotiation, giving hopes to investors that the two sides might bring an end to the spat.

Concerns over an oversupply in oil markets continues to dominate investor sentiment. On Thursday, oil prices slipped amid fears of rising supply and slow consumption. Front-month Brent crude oil futures were trading at $65.88 per barrel, down 24 cents, or 0.4 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $55.96 a barrel, down 29 cents, or 0.5 percent.


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