European (SXXP) stocks declined, with the Stoxx Europe 600 Index dropping the most since November, as a report confirmed a contraction in the euro-area economy and investors weighed Greece’s chances of getting bondholders to accept a debt swap.
Commerzbank AG and Societe Generale SA led a slump in bank shares. Cable & Wireless Worldwide (CW/) Plc retreated 6.7 percent after a newspaper report speculating that a potential bidder won’t make an offer for the company. Nyrstar NV, the largest producer of refined zinc, paced commodity shares lower.
The Stoxx 600 (SXXP) declined 2.7 percent to 258.46 at the close in London, for the biggest drop since Nov. 21, as bondholders owning a fifth of Greece’s debt agreed for the exchange, even as the government has set 75 percent participation as the threshold for proceeding with the plan. The benchmark measure has advanced 5.7 percent so far in 2012.
“With the debt-swap deadline approaching and only 20 percent acceptance so far by private investors, it’s easy to understand why market participants are nervous,” said Stephane Ekolo, chief European (SXXP) strategist at Market Securities in London. “We’re realizing once again that we are far from over with the problems.”
The euro area’s fourth-quarter gross domestic product declined 0.3 percent from the third quarter, the European Union’s statistics office said today, confirming an initial estimate published on Feb. 15.
“A lot of the good news is behind us,” said Pierre Mouton, a fund manager who helps oversee $7.5 billion at Notz Stucki & Cie. in Geneva. “The economy in Europe can be a bit of a worry, but expectations aren’t too high. Everyone is expecting bad numbers.”
The 12 members of the creditors’ steering committee that said they would join in the exchange of Greek debt have debt with a face value of at least 40 billion euros, compared with the 206 billion euros of bonds in private hands, according to data compiled by Bloomberg.
The goal of the swap, which runs until March 8, is to reduce by 53.5 percent the total of privately held Greek sovereign debt, helping the country avert an uncontrolled default.
National benchmark indexes fell in all of the 18 western European market except Greece. The Mediterranean country’s ASE Index (ASE) rose 2.8 percent. The U.K.’s FTSE 100 lost 1.9 percent. France’s CAC 40 dropped 3.6 percent and Germany’s DAX slid 3.4 percent.
The VStoxx Index (V2X), which measures the cost of protecting against a decline in the Euro Stoxx 50 Index, jumped 20 percent to 28.56, the biggest increase since Nov. 1.
A gauge of banks accounted for the largest decline on the Stoxx 600, losing 4.2 percent. Commerzbank AG lost 6.7 percent to 1.77 euros. Societe Generale SA declined 7.8 percent to 23 euros.
Cable & Wireless Worldwide dropped 6.7 percent to 31.21 pence. Vodafone Group Plc may not make an offer for the company by a March 12 deadline, the Telegraph reported, citing market speculation.
Vodafone, the world’s largest mobile-phone company, said last month it is in the early stages of evaluating a bid for Cable & Wireless.
A gauge of mining-company shares slid 2.6 percent as metal prices fell in London. Nyrstar (NYR) lost 4.6 percent to 6.39 euros. Eramet SA, a refined nickel producer, tumbled 6.6 percent to 106.60 euros. Kazakhmys Plc, Kazakhstan’s biggest copper producer, retreated 2.9 percent to 924 pence.
Michael Page, Q-Cells
Q-Cells SE (QCE), a solar-cell maker, plunged 12 percent to 24.9 euro cents, its lowest on record, after losses exceeded sales in the fourth quarter and the company forecast further losses in 2012. Q-Cells posted a loss of 393 million euros in the last three months of 2011 on sales of 353 million euros in a preliminary report today.
PSA Peugeot Citroen slid 3.5 percent to 13.71 euros after announcing plans to raise 1 billion euros ($1.32 billion) in a rights offer and saying it won’t pay a dividend for 2011. Europe’s second-biggest carmaker said it is seeking to raise about 1 billion euros in a rights offer and proceeds will be used for projects with General Motors Co. The company won’t pay a dividend for 2011.
Shareholders, who will have the right to buy 16 shares for every 31 they already own, will pay 8.27 euros per share. That is a 42 percent discount to yesterday’s closing price.
National Bank of Greece SA (ETE) climbed 7.8 percent to 2.49 euros and Alpha Bank SA jumped 19 percent to 1.55 euros.
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