European stocks close sharply lower on political uncertainty; Ubisoft down 3.5%

Getty Images. James Comey will testify before the Senate in his first public comments since President Donald Trump ousted him.·CNBC
Sam Meredith
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European stocks closed sharply lower on Wednesday on reports President Donald Trump asked the former FBI Director James Comey to end a probe into the former national security advisor.

The pan-European Stoxx 600 closed down 1.2 percent with all sectors and major bourses in negative territory.

Autos were among the worst performing sectors on Wednesday. Fiat Chrysler (Milan Stock Exchange: FCA-IT) 's stock fell the most after Reuters reported in the previous session that the European Union would begin legal action against Italy for not policing allegations of emission test cheating by the car maker. Its shares slid nearly 5 percent.

Financial services and banks stocks were also down on concerns that U.S. President Donald Trump may not pursue his pro-growth agenda.

Ubisoft Entertainment (Euronext Paris: UBI-FR), the world's third-biggest entertainment company, posted a jump in profits for the first three months of the year after write-downs were less severe than expected. However, weak guidance appeared to send the firm's shares to the bottom of the European benchmark. Its shares were more than 3.5 percent lower.

Auto Trader Group dropped 3.2 percent after analysts at Berenberg started coverage with a sell recommendation.

In the U.S., markets slumped as investors fretted over the latest news involving President Donald Trump.

The Dow Jones industrial average lost more than 250 points, the S&P 500 slid 1.2 percent and the Nasdaq dropped 1.8 percent.

Politics and Data

Investors appeared increasingly concerned after the latest in a string of crises for the embattled U.S. administration. This has raised further doubts as to Trump's ability to implement an aggressive stimulus program that includes tax cuts and big government spending. The White House has since denied the claims Trump pressed Comey to drop an investigation into former national security advisor, Michael Flynn, over his ties to Russia.

This has sent the dollar to a six-month low and sparked interest for the yen, treasurys and gold.

Meanwhile, euro zone inflation was confirmed at 1.9 percent in April. In the U.K., data showed an increase of 2.1 percent in wages in the first quarter of the year, but real wage growth turned negative.

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