UKX FTSE 100 Index

By Victor Reklaitis, MarketWatch

Software stock Micro Focus loses half its value after CEO exits

European stocks lost ground Monday, extending last week's pullback, as analysts attributed the retreat in part to persistent worries about a global trade war.

The U.S. Federal Reserve's upcoming policy decision also was viewed as helping to peel away investors from equities. Micro Focus International PLC's stock was helping to lead the way lower, after the British software maker warned on its outlook and said its CEO has resigned.

How markets are moving

The Stoxx Europe 600 index fell 0.7% to 374.92. The pan-European equity gauge gave up 0.8% last week, having erased part of its potential weekly loss by gaining modestly on Thursday and Friday.

The Stoxx 600 is down 1.2% in March and lower by 3.7% so far in 2018.

Germany's DAX 30 shed 1% to 12,263.45, and France's CAC 40 index lost 0.8% to 5,240.70. The U.K.'s FTSE 100 index dropped 1.1% to 7,089.02

The euro bought $1.2284, down slightly from $1.2291 late Friday in New York.

What's driving markets

Investors have been worrying this month about a potential global trade war, and central banks have the attention of markets as well, with a Fed decision on Wednesday. The trade concerns come as the Trump administration takes a hawkish stance on U.S. trade with China and moves ahead with tariffs on foreign steel and aluminum.

Investors worldwide watch Fed rate policy, as higher American interest rates can make riskier assets such as stocks less attractive -- and because many companies do business in the word's largest economy.

What strategists are saying

"There is an air of caution in financial markets to start the week as traders look ahead to some key issues in the days ahead," said Richard Perry, Hantec Markets analyst.

"Fears over trade tariffs and protectionism are never far away, whilst the Federal Reserve may be about to signal that an acceleration in its tightening program could be ahead," he said in a note.

Stocks in focus

Micro Focus shares (MCRO.LN) dived 52% for the Stoxx Europe 600's biggest drop. The move came after the software company said CEO Chris Hsu has resigned and warned that revenue for fiscal 2018 will fall more than previously anticipated.

Hammerson PLC shares (HMSO.LN) soared 26% for the Stoxx 600's largest gain after the U.K. mall owner drew and rejected a 4.9 billion-pound takeover offer (http://www.marketwatch.com/story/klepierre-makes-49-bln-hammerson-takeover-step-2018-03-19) from French real-estate investment company Klepierre SA. Klepierre's stock (LI.FR) fell 3.7%.

Melrose Industries PLC (MRO.LN) on Monday lowered the acceptance condition for its hostile 8.1 billion-pound ($11.3 billion) offer for GKN PLC (GKN.LN) and said it will pay up to GBP1 billion into GKN's pension scheme over the period of ownership. Shares of GKN were up 0.8%, while shares of Melrose dropped 1%.

(END) Dow Jones Newswires

March 19, 2018 05:37 ET (09:37 GMT)

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