Bayerische Motoren Werke AG (BMW) and Rio Tinto Group led carmakers and mining companies lower. LVMH Moet Hennessy Louis Vuitton SA (MC) lost 2.6 percent after three Bulgari directors sold a 558 million-euro ($733 million) stake. Swatch Group AG (UHR), the world’s biggest watchmaker, sank 4 percent as profit trailed projections. Banco Comercial Portugues SA (BCP) jumped 21 percent.
The Stoxx Europe 600 Index declined 0.3 percent to 263.55 at the close of trading. The gauge has still advanced 7.8 percent this year amid optimism that the euro area will contain its sovereign-debt crisis and that the economic recovery in the U.S. remains intact.
“The Greek tragedy dominates the headlines,” Viola Stork, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in a report today. “Unsuccessful consultations between the local government and the parties on the necessary austerity measures cause increasing fear of a default.”
Greek Prime Minister Lucas Papademos is convening the nation’s political leaders to seek consensus on the cuts required for another European Union-led bailout. Officials are working on the final draft of the document listing the budget and structural measures required to receive international funding, a government official said.
Greek policy makers have already agreed to make further cuts this year equal to 1.5 percent of gross domestic product, but have yet to decide how to recapitalize banks, ensure the viability of pension funds and reduce wages to increase the economy’s competitiveness.
“The global economy is slowing down, Europe’s sovereign- debt crisis is deepening and the downside risks to the world economy are rising with international demand still slack and global commodities and financial markets continuing to be volatile,” the ministry said.
German industrial output unexpectedly dropped the most in three years in December as Europe’s debt crisis weighed on confidence and the global economic slowdown damped demand. Production fell 2.9 percent from November, when it stagnated, the Economy Ministry in Berlin said today. Economists had expected output to remain unchanged, according to the median of 41 forecasts in a Bloomberg survey.
Rio Tinto, the world’s third-largest mining company, fell 1.9 percent to 3,869.5 pence and Eurasian Natural Resources Corp. dropped 2.6 percent to 703 pence.
Automakers and mining companies were the two worst performing groups among 19 industries in the Stoxx 600 today.
LVMH retreated 2.6 percent to 125.30 euros after Paolo Bulgari, Nicola Bulgari and Francesco Trapani sold 4.48 million shares in the world’s largest maker of luxury goods at 124.50 euros apiece.
Swatch declined 4 percent to 398.30 Swiss francs after reporting 2011 operating profit of 1.61 billion francs ($1.75 billion), missing the average projection in a Bloomberg survey of 1.67 billion francs. Cie. Financiere Richemont SA, the owner of the Cartier brand, fell 2.5 percent to 53.90 francs.
Luxury shares fell. Burberry Group Plc (BRBY) lost 1.8 percent to 1,420 pence and Christian Dior SA (CDI) slid 3.5 percent to 110.45 euros. Hermes International SCA, the French maker of Birkin bags and silk scarves, dropped 2.9 percent to 268.75 euros.
Xstrata Plc (XTA), the largest exporter of power-station coal, retreated 4.9 percent to 1,200 pence. Glencore International Plc slipped 3.8 percent to 443.25 pence after it agreed to buy the company for 39.1 billion pounds ($62 billion) in the biggest mining takeover.
Standard Life Investments Ltd. said it plans to vote against the proposed merger, as it “clearly undervalues Xstrata’s assets and future earnings contribution,” according to David Cumming, head of equities at Standard Life.
Lagardere SCA (MMB) sank 5.7 percent to 21.82 euros, the largest decline in three months. The publisher said it will record losses of about 900 million euros to reflect the lower value of its sports-marketing and pay-television units.
Banco Comercial said on Feb. 3 it will sell new shares in a capital increase and will draw on state funds available for banks to boost their capital levels. The same day, the company reported a full-year loss of 786.2 million euros.
“The uncertainty about the earnings that were presented disappeared, and they weren’t as bad as was expected,” Pedro Oliveira, a trader at Go Bulling in Oporto, northern Portugal, said today in a telephone interview. “The possibility of new shareholders investing in the bank may also be supporting this gain, although it seems excessive to me.”
ArcelorMittal (MT), the world’s biggest steelmaker, gained 3.3 percent to 16.69 euros after reporting fourth-quarter earnings before interest, taxes, depreciation and amortization of $1.71 billion, beating the average analyst estimate of $1.68 billion. The company also forecast that first-half earnings will exceed the previous six months.
Novo Nordisk A/S, the world’s biggest insulin maker, increased 2.2 percent to 752.50 kroner, its highest price since at least 1991, and Shire Plc (SHP) added 2.4 percent to 2,179 pence. Keyur Parekh, an analyst at Goldman Sachs Group Inc., said the two companies are among the best positioned stocks in the pharmaceutical industry.
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