After their recent highs, stock markets are on the back foot at the start of the week, with the banking sector hit by Deutsche Bank’s €8bn cash call and the commodities sector undermined by falling metal prices after key consumer China cut its growth forecasts for this year.

Sentiment was also dented by news of North Korea launching missiles and Donald Trump accusing Barack Obama of tapping his phone during the US election campaign.

But a spate of merger activity - the GM/Peugeot deal and Standard Life linking up with Aberdeen Asset Management - did limit the damage. The final scores showed:

• The FTSE 100 finished down 24.14 points or 0.33% to 7350.12
• Germany’s Dax dropped 0.57% to 11,958.40
• France’s Cac closed 0.46% lower at 4972.19
• Italy’s FTSE MIB fell 1.09% to 19,449.85
• But Spain’s Ibex ended up 0.06% at 9804.1
• In Greece, the Athens market lost 0.96% to 643.50

In the US, the Dow Jones Industrial Average is currently down 55 points or 0.26%.

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.

More from the prime minister’s spokesman on Vauxhall, courtesy the Press Association:

Mrs May’s official spokesman insisted that no specific assurances had been given to Peugeot to secure the future of the UK plants.

The PM had made clear to the company that she wanted the “long history of success” at Vauxhall to continue in this country, said the spokesman.

But he added: “In terms of specific assurances - none sought, none given.

“We have a stated position that we will ensure the competitiveness of this country when it comes to the supply chain, research and development and trade.”

Time for a quick recap, with links to the main points.

General Motors has denied that job cuts are inevitable after agreeing the sale of its European operations to PSA Group.

GM is offloading Britain’s Vauxhall and Germany’s Opel to the owner of Peugeot and Citroën, in a €2.2bn deal announced this morning.

PSA has insisted that staff across its business will get a fair chance to show they can hit productivity targets. CEO Carlos Tavares told reporters in Paris that simply shutting factories down was “rather simplistic”.

Tavares also pledged to stick to existing deals with Vauxhall workers, and General Motors CEO Mary Barra also claimed that the deal was a win-win for both sides.

But unions, and individual workers at Vauxhall, are concerned that jobs could be lost - especially if the plants at Ellesmere Port and Luton don’t secure pledges to manufacture new models.

Some industry analysts have also predicted job cuts as PSA looks to consolidate its operations.

The UK government is hopeful that Vauxhall could thrive under PSA’s ownership.

A spokesman for Theresa May told reporters that:

The prime minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.

Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.

Both the prime minister and Ms Barra expressed their confidence that the deal had the potential to strengthen the Vauxhall brand and allow for further growth, supported by the government’s Industrial Strategy and the continued strength of the automotive sector in the UK.

(that’s via our Politics Live blog)

Local MPs have also been banging the drum, insisting that Vauxhall plants are already pretty efficient.

Labour’s Justin Madders, who represents Ellesmere Port, says:

There is no doubt that we have some of the most efficient plants in Europe so we have a good tale to tell and we should not underestimate the positive impact on sales that having a U.K. manufacturing base brings.

There should be no doubt that one of the biggest selling points to UK consumers is that Vauxhall is a British brand that supports British jobs. That is something that I know will be stressed to PSA.

Theresa May told General Motors yesterday that UK jobs need to be protected, as the carmaker put the finishing touches to the sale of its European arm.

The prime minister gave the message to GM CEO Mary Barra, who gave some reassurances in response, according to May’s office.

Here’s the official statement:

The Prime Minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.

Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.

Despite that reassurance, workers in Ellesmere Port are understandably concerned, as the FT’s Andrew Bounds explains:

Back in the eurozone.... Greece has suffered another blow in its battle to emerge from its debt crisis.

New figures show that the Greek economy shrank by 1.2% in the final three months of last year. That’s a very sharp decline, and much worse than the initial estimate of a 0.4% fall in GDP.

It’s the worst contraction since 2015, when Greek banks were closed and capital controls imposed as the country came close to leaving the eurozone.

The figures undermine hopes that the Greek economy was turning the corner.

Indeed, Capital Economics are worried that the EU’s forecast for a growth rebound this year looks rather too optimistic.

Something for the Greek government to ponder at today’s cabinet meeting, where ministers will discuss a new growth strategy....

Richard Gane, director and automotive sector specialist at supply chain firm Vendigital, says this is “a bad day” for the UK car industry.

He isn’t convinced by PSA’s claim that factories won’t need to close, and believes the UK government needs to offer PSA some ‘inducements’ to protect Ellesmere Port and Luton.

“GM tried to sell Vauxhall-Opel in 2008 and these businesses have been losing money since then so today’s decision to sell is not a surprise. There is great concern however, that once current production runs are completed Vauxhall’s UK-based plants at Ellesmere Port and Luton could close, forcing around 4,500 redundancies.

“While it is not yet definite that the plants will close, there is clearly concern that this could happen because in the case of the Astra, for example, around 75% of components are sourced from the EU and the vast majority of the vehicles made at Ellesmere Port are sold outside the UK. If rumours are correct and PSA Group is planning to combine platforms with Peugeot’s next new model, there would be a strong reason to exit the UK.

Mike Hawes, chief executives of industry body SMMT, is more hopeful:

“The UK is a competitive player in the automotive industry thanks to its rich heritage, record levels of productivity, skilled workforce and strong collaboration with government. The outlook for vehicle production remains positive with investment commitments made over the past few years still delivering growth.

We are hopeful that this deal will provide a positive future for the plants at Luton and Ellesmere Port and the wider supply chain given their inherent advantages. We have been encouraged by the active role government has played reassuring investors of its determination to safeguard our competitiveness despite the uncertainty of Brexit.”

Rebecca Lindland, executive analyst at car valuer Kelley Blue Book, believes selling Opel and Vauxhall makes sense for General Motors.

It allows the US auto giant to focus on emerging markets such as China and India, she says:

“Opel/Vauxhall was a profit losing puzzle no one at GM could solve for decades, and outside forces such as Brexit and an increasingly complex regulatory environment did not help the situation.

Unloading Opel/Vauxhall and the European part of the financing greatly improves GM’s balance sheet, allowing investments in growing markets such as China and India and frees up capital for further expansion into ride and car sharing and autonomous vehicles.

For PSA, the acquisition should provide bargaining power with its suppliers and economies of scale. But production cost savings will be challenged by the powerful labor unions of Germany, the UK and France.

The head of the Unite Union, Len McCluskey, has confirmed that PSA has promised to stick to Vauxhall’s existing commitments.

That could reassure workers about their short-term future....

....but McCluskey is also worried that the Ellesmere Port plant, which makes Vauxhall Astras, needs a plan for beyond 2021.

The Press Association has the details:

Len McCluskey told Sky News that the head of the PSA Group, which makes Peugeot, had given reassurances that all commitments would be honoured as part of the deal to buy General Motors’ European operations, which include Vauxhall in Britain.

“There is a cautious optimism,” he said. “But of course the real issue is not the current products, it’s about the new models and we’ll be determined to make certain that the British plants have a long term future.

“The current model in Ellesmere Port goes up to 2020/2021 but really it’s this time next year, maybe the middle of next year, (when) we would need to secure acceptance of a new model there. That’s really the challenge for all of us.

Finally, PSA gets a question about Britain’s exit from the European Union....

Q: What impact will Brexit have on this deal?

Carlos Tavares says that no-one knows how Brexit is going to unfold, but the key issue is the trade relationships that Britain has with Europe.

If you think deeply about the two scenarios -either it’s hard or soft.

If it’s a soft Brexit, then the focus is simply on performance - being competitive in the UK versus other countries. In that set-up, the cheaper pound could boost competitiveness.

If it is a hard Brexit - it will be “a very nice opportunity” to source more car parts from inside the UK, Tavares continues.

That would allow Vauxhall to record more of its costs in sterling, bringing them in line with revenues.

This means that the UK supplier base needs to be developed....something that the UK government “totally understands”, Tavares says.

Journalists in Paris are pressing Peugeot-Citreon about the fears of job cuts.

Q: What guarantees can PSA give to workers at Opel and Vauxhall?

Carlos Tavares promises that all existing agreements with unions at the two car companies will be honoured.

This is not tactical, this is ethics. If there is a deal, we will respect it.

But what about the future, when those agreements expire?

Tavares repeats his line about giving workers a chance to improve efficiencies.

Q: Can you achieve the planned efficiency savings without cutting staff?

Tavares says the targets aren’t based on cutting jobs.

Instead, it is based on allowing “talented and creative” staff to show their potential.

We will offer workers a European benchmark which they can compare themselves to, Tavares adds.

ITV’s Joel Hills gets the microphone.

Q: General Motors is taking a €4.5bn write-down on this deal - isn’t that a sign that it was keen to get out of Europe?

GM’s Mary Barra reiterates that this deal is an “opportunity to strengthen the business” and help GM to stay competitive.

Q: Can Peugeot-Citreon make this deal work without closing factories?

PSA’s Carlos Tavares says that PSA hasn’t shut a factory since he took control of the company.

Shutting down a plant is “rather simplistic”, Tavares continues.

His philosophy is that if you trust people, they will come up with ideas and solutions that you wouldn’t have thought off.

But for that to happen, workforce and managers must believe that they are being given a chance.

Tavares concludes:

Everyone will have a chance to reach the benchmark of efficiency.

As we progress towards that benchmark of efficiency, we do not need to shut down plants.

Q: PSA will have 19 factories once this deal goes through. Will you keep them all open?

PSA’s Carlos Taraves doesn’t make any promises -- instead, he signals that car workers hold their future in their own hands.

We believe that people understand that the only thing that protects them is the ability to be at the right level of performance, Taraves says.

As a company that had a “near-death” experience four year ago, we know that “the only thing that protects us is performance”, Taraves adds.

GM’s Mary Barra is also attending the PSA press conference in Paris. She joins Carlos Tavares on the stage now....

Barra says the deal will put Opel and Vauxhall on a firmer footing for the future, and create a new era for the two companies.

She admits that it wasn’t an easy decision, but says GM is convinced that the sale is the right decision for customers, workers and shareholders.

Barra also argues that GM Europe would have hit its goal of breaking even in 2016 “if it wasn’t for Brexit”.

PSA’s chairman, Carlos Tavares, tells journalists in Paris that today’s deal will create “create a new European automotive champion” and unleash the full potential of Vauxhall and Opel.

Tavares insists that PSA is committed to both brands.

In conclusion, this deal is a game-changed for PSA, Tavares adds.

Labour MP Gavin Shuker, who represents Luton South, has welcomed the end to the uncertainty over Vauxhall’s future.

Shuker also points out that Vauxhall’s factories are more efficient than most of PSA’s other operations -- a reason not to consider closing them....

PSA’s chairman, Carlos Tavares, is trying to reassure Vauxhall and Opel workers about the future.

Speaking as the deal is announced, Tavaras says:

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround.

We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”

“We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”

But....PSA is also adamant that it will make cost-savings once the deal goes through....

It says:

The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround

It’s official - General Motors is pulling out of the European car market by selling its Vauxhall and Opel divisions in a €2.2bn (£1.9bn) deal.

The agreement, announced a few minutes ago, will see France’s PSA Group (the firm behind Peugeot and Citroen) take ownership of Germany’s Opel and Britain’s Vauxhall.

It ends weeks of speculation over the future of both car brands, and will make PSA Europe’s second-largest automotive company, with 17% of the market.

But it also means fresh uncertainty for workers at Vauxhall’s two British plants, at Ellesmere Port and Luton, if PSA decides to cut costs.

Details and reaction to follow....

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

There’s a lot afoot this morning, starting with the car industry, as General Motors seals a deal to sell its Opel and Vauxhall divisions to France’s PSA.

In the UK, two of Scotland’s biggest companies – Standard Life and Aberdeen Asset Management – are on track to merge, creating the second biggest fund manager in Europe.

Germany’s Deutsche Bank is also in focus, after announcing plans to raise €8bn of fresh capital to bolster its balance sheet.

European stock markets are expected to open smoothly, with the FTSE 100 hovering close to last week’s record highs.

City traders will also be preparing for Wednesday’s Budget announcement, with chancellor Philip Hammond expected to announce plans to set aside billions of pounds to cover the impact of Brexit.

We’ll be covering all the main events through the day....