European Stocks Slide for Third Week as BHP Billiton, Reinsurers Retreat

European stocks posted their third week of losses as Spain and Greece suffered ratings downgrades and Libya’s Muammar Qaddafi used planes to attack rebels, adding to concern that the global economic recovery will falter.

BHP Billiton Ltd. led raw-material shares to the biggest decline among 19 industry groups on the Stoxx Europe 600 Index as a report showed export growth slowed in China, the world’s biggest consumer of commodities. Swiss Reinsurance Co. and Munich Re paced a selloff in insurers after Japan’s biggest earthquake on record.

The Stoxx 600 declined 2.3 percent to 275.42 this past week. The benchmark gauge has lost more than 5 percent since reaching a 2 1/2-year high on Feb. 17 as crude oil surged amid fighting between Libyan rebels and forces loyal to their ruler for the last 41 years, Qaddafi.

“To say that market sentiment has turned negative this week would be something of an understatement,” said London- based Howard Wheeldon, a senior strategist at BGC Partners. There is “renewed expression of doubt by markets as to where, on the back of the oil price and Middle East contagion, the global economy goes from here. Adding to market woes has been the sizable earthquake in Japan.”

National benchmark indexes fell in 17 of the 18 western Europe markets this week as Moody’s Investors Service cut Spain’s credit rating to Aa2 and lowered Greece’s government bond rating to B1. France’s CAC 40 Index dropped 2.3 percent, the U.K.’s FTSE 100 Index sank 2.7 percent, Germany’s DAX Index lost 2.8 percent and Spain’s IBEX 35 gauge slid 1 percent. Greece’s ASE Index advanced less than 0.1 percent.

Trichet, Weber

European Central Bank President Jean-Claude Trichet this week said the world’s central bankers were united in their desire to prevent surging oil prices from fanning broader inflation. Council member Axel Weber said he did not want to correct market expectations for as many as three quarter-point rate hikes this year.

“There are a number of factors that make us a little cautious,” Graham Secker, head of European equity strategy at Morgan Stanley in London, said on Bloomberg Television. “We are at the start of a new interest rate hike cycle in Europe and the higher oil price is putting pressure on economies.”

Oil prices posted their first weekly drop in a month in New York following the Japanese tremor. In Saudi Arabia, police and anti-riot vehicles prevented Arabs demanding a constitutional monarchy from holding a “Day of Rage” in Riyadh. Brent oil fell for the first week in seven.

BHP Billiton, Vedanta

BHP, the world’s largest mining company, tumbled 7 percent, leading a gauge of metal producers lower as base metals fell. Vedanta Resources Plc sank 11 percent this past week, while Antofagasta Plc dropped 6.8 percent.

Copper fell 7 percent on the London Metal Exchange this past week as a report showed that China’s exports rose at the slowest pace since November 2009.

Swiss Re, the world’s second-biggest reinsurer, dropped 6.9 percent, while Munich Re, the largest, lost 6.3 percent after the 8.9-magnitude earthquake struck off the coast of Japan, shaking buildings in Tokyo and unleashing a seven-meter-high tsunami that engulfed towns north of the capital.

Officials at the two reinsurers declined to comment on their possible losses from the quake. Scor SE, France’s largest reinsurer, plunged 9.6 percent. On March 8, Scor said that catastrophes in Australia and New Zealand will cost it 200 million euros ($277.5 million), net of retrocession.

ARM, Home Retail

Elsewhere in the market, ARM Holdings Plc lost 10 percent after analysts said tablet computer makers other than Apple Inc. will sell few of their devices. JPMorgan Chase & Co. said ARM, the designer of chips that power Apple’s iPhone, was most at risk if demand for non-Apple tablets decreases.

Home Retail Group Plc slumped 7.7 percent in London after the company lowered its full-year profit forecast as sales at its Argos stores declined.

Iberdrola Renovables SA paced advancing shares, jumping 13 percent after parent company Iberdrola SA bid 2.5 billion euros to buy out the minority investors.

Bulgari SpA (BUL) soared a record 61 percent after LVMH Moet Hennessy Louis Vuitton SA agreed to buy the world’s third- largest jeweler for about 3.7 billion euros in what would be LVMH’s largest acquisition in at least a decade.

Tognum AG surged 37 percent after Daimler AG and Rolls- Royce Group Plc offered to buy the German maker of heavy-duty engines for 24 euros per share.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net.

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