European Stocks Drop for First Week in Four; Kazakhmys Retreats

European stocks fell for the first week in four as Alcoa Inc. and Google Inc. (GOOG) kicked off the U.S. earnings season with weaker-than-estimated results and Japan raised the severity rating of its nuclear crisis.

Kazakhmys Plc (KAZ), Kazakhstan’s biggest copper producer, and Antofagasta Plc (ANTO), the copper producer controlled by Chile’s Luksic family, sank more than 7 percent as the metal had the biggest weekly drop in a month. Commerzbank AG (CBK) tumbled 16 percent as it sold conditional mandatory exchangeable notes to investors as part of a capital increase. National Bank of Greece SA (ETE) fell 8.1 percent as the nation’s bonds declined.

The benchmark Stoxx Europe 600 Index slid 1.4 percent this past week. The gauge has still rallied 6 percent from this year’s low on March 16 amid speculation the economic recovery will withstand the effects of Japan’s worst earthquake on record and popular revolts in the Middle East and north Africa.

“European markets were negatively affected after the Fukushima nuclear crisis was upgraded to the highest possible level now on par with Chernobyl,” said Anita Paluch, a sales trader at ETX Capital in London. “The unofficial start of the earnings season in the U.S., with Alcoa reporting, delivered rather disappointing results.”

Alcoa, Google Earnings

Alcoa and Google both fell after reporting earnings this week. Alcoa, the largest U.S. aluminum producer, posted sales that trailed the $6.06 billion average estimate of eight analysts in a Bloomberg survey and said raw-material costs climbed. Google, the world’s biggest Internet-search company, reported a 54 percent jump in first-quarter operating costs, outstripping a sales gain of 29 percent. Bank of America Corp. reported first-quarter profit that missed projections.

Japan’s Nuclear and Industrial Safety Agency raised the severity rating of the nuclear crisis at its stricken Fukushima Dai-Ichi plant to seven, the same as the 1986 Chernobyl disaster. Japan’s Economic and Fiscal Policy Minister Kaoru Yosano said that the country’s March 11 earthquake, its largest on record, may result in a larger hit to the economy than previously estimated.

Kazakhmys slumped 8.7 percent, while Antofagasta retreated 7.1 percent. Copper dropped 4.9 percent on the London Metal Exchange this week as record Chinese production added to supply and stronger-than-forecast growth in the country prompted speculation the government might further curb lending. Basic- resources shares were the worst performers among 19 industry groups in the Stoxx 600.

Commerzbank Drops

Commerzbank plummeted 16 percent, the largest weekly decline in almost two years. Germany’s second-biggest lender raised 4.3 billion euros from selling conditional mandatory exchangeable notes, or Comen, at 4.25 euros apiece. Germany’s bank-rescue fund, Soffin, will convert 1.4 billion euros of silent participations, a form of non-voting capital, into shares to maintain its stake at 25 percent plus one share.

National Bank of Greece, Alpha Bank SA, Piraeus Bank SA (TPEIR) and EFG Eurobank Ergasias SA (EUROB) all lost more than 8 percent.

They yield on Greece’s 10-year bond climbed above 13 percent for the first time since at least 1998 this week as German Finance Minister Wolfgang Schaeuble told Die Welt newspaper that the Mediterranean country may need to restructure its debt. Schaeuble sought yesterday to retreat from the comments, telling reporters in Washington that “the conclusions from it are somewhat misguided.”

Hochtief, Pandora

Hochtief AG (HOT) tumbled 7.5 percent. Germany’s largest publicly traded builder said pretax profit may fall about 50 percent this year after its Australian unit predicted a loss and announced a A$757 million ($800 million) stock sale.

Pandora A/S, the Danish jewelry maker that sold shares last year, declined 15 percent after its 2011 sales forecast missed most analyst estimates. The company said revenue will rise to at least 8.34 billion kroner ($1.56 billion) this year. The average estimate in a Bloomberg survey of 11 analysts was for revenue of 8.59 billion kroner. Micro Focus International Plc (MCRO) sank 11 percent after Chief Executive Officer Nigel Clifford quit after less than a year in charge. Two months ago, the software company lowered its forecasts for sales and adjusted earnings, saying performance since the start of the fiscal second half had been disappointing.

Roth & Rau AG (R8R) soared 16 percent after Meyer Burger Technology AG made a 357 million-euro ($516 million) bid to combine their solar-equipment units. Roth & Rau agreed to a 22 euros-a-share offer.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.

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

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