European stocks were mixed Wednesday although fading equity sentiment following a rare credit downgrade for China and the developing security situation in the U.K., where Prime Minister Theresa May increased the terrorist threat level to "critical" last night and warned that a new attack could be imminent, kept investors in a caution mood.
The region-wide Stoxx Europe 600 index held onto a modest 0.15% gain in the opening hour of trading, but regional benchmarks, including Germany's DAX performance index and the FTSE 100, drifted modestly lower. France's CAC-40 was marked 0.1% higher, thanks in part to solid gains for the country's biggest banks -- BNP Paribas SA (BNPQY) and Societe Generale SA (SCGLY) .
The pound was marked little change from Tuesday's close at 1.2975 as trading began in Europe, with investors yet to factor-in changes to the country's terror threat level, which could mean as many as 5,000 troops deployed at public events over the coming weeks, after Prime Minister Theresa May increased the terrorist threat level to "critical" last night and warned that a new attack could happen at any time.
In equity markets, an early mover of note were shares in Fiat Chrysler (FCAU) , which extended declines after the U.S. Department of Justice said it is suing the Italian-American automaker over illegal emissions' management technology found in its vehicles.
The DoJ has filed a civil complaint alleging that Fiat failed to disclose engine management software found in its vehicles, at the certification stage, and that the engine feature in question does constitute a so called defeat device. Defeat devices are designed to mislead regulators over the true emissions' output of an engine when vehicles are tested in lab conditions.
