European stocks retreated for a third day as Libya cracked down on anti-government protests amid continuing political unrest in the Middle East and North Africa, overshadowing a jump in U.S. consumer confidence.
Air France-KLM Group fell 3 percent as oil climbed to the highest price in more than two years. Informa Plc, the U.K. publisher of Lloyd’s List, lost 2.9 percent after earnings declined. Jyske Bank A/S advanced 7.5 percent after reporting profit that beat analysts’ estimates. Technical problems forced a 6 1/2-hour delay to the start of trading in Italy today.
The Stoxx Europe 600 Index dropped 0.6 percent to 285.38 at the 4:30 p.m. close in London for the biggest three-day decline since November. The gauge has still rallied 3.5 percent this year amid speculation the economic recovery will continue. It peaked at the highest level since August 2008 on last week.
Events in the Middle East and North Africa are “a trigger for a correction,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. The market is pricing in the possibility that instability could spread to Saudi Arabia, he said.
Oil surged to the highest price since September 2008 as soldiers deserted Libyan leader Muammar Qaddafi’s government and diplomats resigned in protest over a crackdown on anti- government demonstrators that has left hundreds dead. Chinese authorities blocked foreign news reports on protests to resist any movement toward pro-democracy revolts.
“Markets are becoming increasingly nervous over the deteriorating situation in both North Africa and the Middle East,” said Ben Potter, a research analyst at IG Markets in Melbourne. “There’s a notable risk of contagion amidst reports that China is doing all it can to block coverage of the protests.”
Stocks recouped some losses after a U.S. report showed consumer confidence rose in February to the highest level in three years. The Conference Board’s index of sentiment increased to 70.4 from 64.8 the prior month. Economists had projected a reading of 65.5, according to the median forecast in a Bloomberg News survey.
National benchmark indexes declined in all 18 western European markets, except Portugal. The U.K.’s FTSE 100 Index fell 0.3 percent and France’s CAC 40 sank 1.2 percent. Greece’s ASE Index slid 2.9 percent.
Italian Trading Delay
Italy’s FTSE MIB slid 1.1 percent after trading opened 6 1/2 hours late because of “technical issues.” UniCredit SpA, Italy’s biggest bank, slid 1.8 percent to 1.84 euros. Impregilo SpA, the country’s largest construction company, lost 2.1 percent to 2.62 euros. The company has 1 billion euros of projects in Libya, according to Milan broker Equita Sim SpA.
Air France, Europe’s biggest airline, slumped 3 percent to 11.79 euros amid speculation higher oil prices will increase fuel costs. The decline pulled a measure of travel and leisure shares to the biggest decrease among 19 industry groups in the Stoxx 600.
Informa sank 2.9 percent to 436.2 pence, the biggest retreat this month. The publishing company said full-year net income fell to 98.9 million pounds ($160 million) from 105.6 million pounds.
Greece may be unable to sustain efforts to tackle its debt, forcing a restructuring of bond payments, European Bank for Reconstruction and Development President Thomas Mirow said in an interview with Sueddeutsche Zeitung.
Q-Cells SE retreated 4.2 percent to 3.17 euros even after the German solar company reported increased 2010 sales.
“2011 will look more challenging,” Stefan Freudenreich and Sebastian Growe, Frankfurt-based analysts at Equinet AG, wrote in a report. “The stock does not offer any upside after the recent outperformance versus peers.” The brokerage reiterated its “hold” recommendation on the shares.
Jyske Bank gained 7.5 percent to 237 kroner, the biggest advance since May, as Denmark’s second-largest lender reported fourth-quarter net income of 310 million kroner ($56.3 million) compared with a median estimate of 295 million kroner in a Bloomberg survey of six analysts.
Croda International Plc soared 9.7 percent to 1,639 pence, the biggest jump in more than two years, as the supplier of ingredients for Nivea sunblock announced a share buyback program and earnings that beat analyst estimates.
Kerry Group Plc rose 2.8 percent to 26.12 euros as Ireland’s biggest food company said full-year net income climbed to 324.2 million euros ($440 million) from 201.2 million euros a year earlier.