European stocks slip but still see strongest ever month

Watch: Stocks mixed as they head for record month

Stocks declined in much of Europe on Monday, but still ended November with the highest ever monthly gains fuelled by vaccine breakthroughs.

Leading indices closed lower, with analysts highlighting profit-taking and attention on a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies underway this week.

“An informal side OPEC+ meeting last night has seemingly failed to agree a plan to maintain production cuts through Q1,” Deutsche Bank analysts wrote in a note. “So lots at stake as we head into a two day meeting of the full group today and tomorrow.”

Progress had not been reported by the time European markets closed as talks continued on Monday. Oil and gas stocks on the European Stoxx 600 index (^STOXX) sank 3.4% as oil prices fell, with other cyclical stocks including travel and banks also under pressure.

The wider Stoxx and other leading indices opened higher before slipping back into negative territory in afternoon trading, with the Stoxx down 1%. The FTSE 100 (^FTSE) in London slumped 1.6% as Brexit concerns also weighed, the CAC 40 (^FCHI) lost 1.4% in Paris, and the export-focused DAX (^GDAXI) lost 0.3%.

The Stoxx’s 13.7% gains in November mark the strongest monthly leap on record.

"After such impressive gains, and with the end of the year so close, it is hardly surprising that a significant amount of fund rebalancing and profit taking is felt across markets, putting some modest pressure on indices," said Chris Beauchamp, chief market analyst at IG.

“But this should be temporary, as further inflows and positive seasonality, plus the continued attempt to look beyond the virus to a time when vaccines are brought in, help to avoid any major declines.”

READ MORE: Vaccine news boosts UK business confidence

US stocks opened lower after the Thanksgiving weekend, with markets operating only reduced hours on Friday and closed on Thursday. The S&P 500 (^GSPC) fell 0.9% as European markets closed, while the Dow Jones (^DJI) fell 1.3% and the Nasdaq (^IXIC) lost 0.7%.

Stocks had fallen overnight in Asia, despite Chinese official purchasing managers’ data showing the strongest manufacturing growth since September 2017. The headline reading for factory output came in at 52.1, beating the expected 51.5 figure.

The Shanghai Composite (000001.SS) in China lost 0.5%, and the Shenzen Component (399001.SZ) closed down 0.2%.

The Hong Kong Hang Seng (^HSI) fell 2.1%, and Japan’s Nikkei (^N225) shed 0.8%.

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