European stocks edge lower; weak manufacturing activity, German politics weigh

Investing.com – European stock markets drifted lower Monday, with sentiment hit by disappointing regional activity data as well as renewed political uncertainty.

At 03:55 ET (08:55 GMT), the in Germany traded 0.1% lower, the in France fell 0.3% and the in the U.K. dropped 0.1%.

Eurozone manufacturing activity slips

Eurozone manufacturing activity remained in contraction territory in August, with the final , compiled by S&P Global, coming in at 45.8 in August, just ahead of a 45.6 preliminary estimate but firmly below the 50 mark separating growth from contraction.

This suggests a recovery in the important manufacturing sector could be some way off, particularly as the downturn in Germany’s manufacturing sector, which accounts for about a fifth of Europe’s biggest economy, continued to gather pace in August, falling to 42.4 in August from 43.2 in July.

The cut interest rates in June to try and stimulate the region’s economy, and looks likely to do so again later this month after eurozone inflation fell to 2.2% in August, a more than three-year low. 

Raised political uncertainty 

Also weighing on sentiment Monday was the further fracturing of German politics, after Alternative for Germany became the first far-right party to win a state legislature election in the eurozone’s dominant country since World War Two with its result in Thuringia.

With a year to go until Germany’s national election, these results could result in infighting amongst German Chancellor Olaf Scholz’s three-party coalition, given the apparent popularity of AfD’s anti-NATO, anti-immigration and Russia-friendly stance.

The German government’s faltering authority could also complicate European policy when the bloc’s other major power, France, is still struggling to form a government after snap elections in June and July.

Rightmove (OTC:) soars on potential offer

In the corporate sector, Rightmove (LON:) stock soared 20% after REA Group, an Australian digital property giant, announced a potential cash and share offer for the U.K. online real estate platform.

Crude edges higher

Crude prices edged higher Monday, rebounding after recent losses as traders digested different Chinese manufacturing survey results.

By 04:55 ET, the futures (WTI) traded 0.2% higher at $73.70 per barrel, while the contract climbed 0.2% to $77.07 per barrel.

An official survey showed on Saturday that sank to a six-month low in August, following on from a weak performance in the second quarter, but a suggested manufacturing activity swung back to growth in August, complicating the issue. 

Both Brent and WTI posted losses last week, adding to two consecutive weaker months as demand concerns outweighed recent disruptions in Libyan oil supply and tensions in the oil-rich Middle East.