* Euro STOXX 600 slumps 1.3%
* Bank stocks slip 2.6% to lowest in nearly 3 weeks
* Sterling down 0.9% vs dollar to lowest in a month
* Brexit uncertainties, U.S. stimulus timing dent sentiment
* No-deal exit more likely than trade deal - von der Leyden
* 2020 asset performance http://tmsnrt.rs/2yaDPgn
By Tom Wilson
LONDON, Dec 11 (Reuters) - World shares slipped and sterling
skidded to its lowest in nearly a month on Friday as markets
confronted the risk of Britain leaving the European Union
without a trade deal, with doubts over U.S. stimulus also
nagging.
Europe's broad Euro STOXX 600 .STOXX shed 1.3%, with
indexes in Paris .FCHI and London .FTSE slumping as much as
2.1% and 1.1% respectively.
Banks .SX7P were among the worst hit, sliding 2.6% to
their lowest in nearly three weeks, with Spain's lender-heavy
main index .IBEX down 2.3%.
Britain is now more likely to leave the European Union's
orbit on Dec. 31 without a trade deal than with an agreement,
European Commission President Ursula von der Leyden reportedly
told the bloc's 27 national leaders on Friday. The gloomy outlook echoed that of British Prime Minister
Boris Johnson, who had said on Thursday there was "a strong
possibility" Britain and the EU would fail to strike a trade
deal. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 50 countries, turned negative and was last down 0.2%.
Britain and the EU have set a deadline of Sunday to find an
agreement, before Britain exits the bloc's customs union and
single market on Jan. 1. The odds of a disorderly Brexit rose to
61% on Friday from 53% a day before, according to the Smarkets
exchange. Sterling fell 0.9% against the dollar, touching its lowest
point since Nov. 16 and putting it on course to ending five
straight weeks of gains. Volatility also rose to its highest in
over eight months. "Investors are right to be worried," said Olivier Marciot, a
portfolio manager at Unigestion. "If there is no deal, there
will be implications. There could be some sort of correction."
A no-deal Brexit would damage the economies of northern
Europe, send shock waves through financial markets, block up
borders and wreak chaos through the delicate supply chains which
stretch across Europe and beyond.
Morgan Stanley said it expects London's FTSE 250 index to
drop 6%-10% if London and Brussels fail to agree a trade deal,
with insurance, real estate and housebuilding stocks also at
risk. The Brexit jitters compounded uncertainty over prospects for
a near-term U.S. fiscal stimulus.
U.S. stocks had a mixed day on Thursday as Democrat House
Speaker Nancy Pelosi suggested wrangling over a spending package
and coronavirus aid could drag on through Christmas. Wall Street futures gauges ESc1 fell 0.9%.
Investors in Asia had earlier bet on stronger economic
growth next year as more countries prepare for vaccinations.
U.S. authorities voted overwhelmingly to endorse emergency
use of Pfizer's coronavirus vaccine while doses of a COVID-19
vaccine made by China's Sinovac Biotech SVA.O are rolling off a
Brazilian production line. But MSCI's ex-Japan Asia-Pacific index .MIAPJ0000PUS
turned negative as the mood soured, and was last down 0.2%.
UPBEAT IPOs, DOWNBEAT JOBS
Recent U.S. initial public offerings also suggested
investors were generally upbeat on equities, even as job data
pointed to weakness in the world's biggest economy.
Shares of Airbnb Inc ABNB.O more than doubled in their
stock market debut on Thursday, valuing the home rental firm at
just over $100 billion in the biggest U.S. initial public
offering of 2020. DoorDash Inc DASH.N stocks doubled in their
first day of trading. At the same time, the number of Americans filing claims for
unemployment benefits grew more than expected last week as
mounting COVID-19 infections led to more business restrictions.
The data "raises the prospect that the labour market
progress seen in recent months is slowing significantly,"
Deutsche Bank analysts wrote.
The British pound traded at $1.3194 GBP=D4 , with its 1.5%
loss so far this week versus the dollar setting it on course for
a first weekly loss since late October.
The dollar was up 0.3% against a basket of six major
currencies USD= , near lows not seen since spring 2018.
The euro held not far from two-and-a-half-year highs of
$1.2140 EUR= after the European Central Bank delivered a fresh
stimulus package. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates in 2020 http://tmsnrt.rs/2egbfVh
2020 asset performance http://tmsnrt.rs/2yaDPgn
Sterling volatility https://tmsnrt.rs/3m7AZ3W
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