European stocks traded lower as the growing sentiment on the Brexit vote weighed on the global financial market and as the market looked forward to the two-day policy meeting of the Federal Reserve.

Before the release of the vote to leave the European Union on June 23, the European equities tumbled  alongside with the skid on the global market. Investors have started settling their funds in safe haven assets as the risks in the financial market arise.

Earlier today, the German 10-year government bond declined to zero level for the first time and the Stoxx Europe 600 Index lost 1.5 percent. Headed by the slide of miners and automotive companies, approximately 19 stocks on the Stoxx 600 edged lower.

The Stoxx 600 failed to keep the bullish trend attained from February to April as the European Central Bank remained indecisive on the necessary measures on the global economic growth. Since the sentiment on the Brexit vote heightened, the benchmark has faced successive fall.


Futher, the FTSE 100 declined 0.34 percent lead by the negative performance of Lloyds Banking, Barclays and Shroders. A chief market analyst noted that the continued downward pressure on yields and flattening of the yield curve has reignited concerns about the fiscal health of banks across Europe as banking stocks got crushed once again.

The Dax dropped 1.23 percent, while the Cac40 went down 1.34 percent. However, the electronics sector remained moderately higher.

 “There are also questions about the actions of the Bank of Japan, the Bank of England, the Fed, the European Central Bank’s bond buying, company earnings. For investors, the glass is half empty and not half full at the moment -- there is a lot of combined nervousness,” stated by the biggest bank in Germany.

The Bank of England is scheduled to have a meeting before the week ends and the market expect a lower interest rate amid the stability of the inflation in the United Kingdom. Last month, the bank informed the market that a Brexit vote could drive a technical recession followed by a reduction of its growth projections.

Former ECB president Jean-Claude Trichet expected that the major central to be in constant contact as the Brexit scenario could be very volatile. Banks are seen to be cautious to maintain the market confidence and the financial system as the referendum is approaching.


In Asia, the Nikkei 225 slumped 1.0 percent as the revised Japanese industrial output data for May dropped 3.3 percent on an annual basis, however, the figures turned 0.5 percent higher on a monthly basis. The Tokyo Stock Exchange Tokyo Price Index lost 0.98 percent before the policy meeting of the Bank of Japan.

Stocks in Taiwan changed hands higher and the Taiwan Weighted advanced 0.47. The CSI 300 composite added 0.31 percent ahead  of the announcement whether to include the mainland Chinese stocks in the global indices of MSCI.

Separately, oil futures skid over the Brexit vote while the International Energy Agency projected a stable oil market in the following months and a stronger global oil demand.

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