European stocks fell, paring the Stoxx Europe 600 Index’s fifth straight monthly gain, as ArcelorMittal and BG Group Plc (BG/) reported disappointing results and euro-area governments pressured Greece to increase spending cuts in return for aid.
ArcelorMittal dropped 6.4 percent after the world’s biggest steelmaker posted its smallest quarterly profit in almost three years. BG Group Plc sank a record 14 percent as its energy company’s production forecast disappointed investors. Air France-KLM (AF) Group and Deutsche Lufthansa AG (LHA) both rose at least 7 percent after Europe’s largest airlines reported earnings that beat estimates.
The Stoxx 600 lost 0.5 percent to 270.30 at the close of trading after earlier rallying as much as 0.5 percent. The index erased gains after euro-area finance ministers called on Greece to instigate deeper budget cuts during a conference call. The gauge rose 0.7 percent in October, completing its longest monthly winning streak in six years.
“Given the lack of progress we have seen with summits, once again, there has been a lot of words and not much action,” Chris Beauchamp, a market analyst at IG in London, said in a telephone interview. “We are seeing disillusionment with European markets. Lufthansa has kept markets from slipping down too much.”
Trading volumes across Europe were lower for the past two days amid the longest weather-related shutdown of U.S. equity markets in more than a century. The number of shares changing hands in companies listed on the Stoxx 600 (SXXP) today was 2.7 percent less than the 30-day average, according to data compiled by Bloomberg. Volume had been down by more than 35 percent the previous two days.
Euro-area governments pressed Greece to make deeper spending cuts to keep aid flowing. With Greece pleading for a 31 billion-euro ($40 billion) aid payout in November and facing a sixth year of recession in 2013, euro finance ministers said unfreezing loans for the country required more efforts in Athens to rein in the budget deficit and deregulate the economy.
“We called on the Greek authorities to solve remaining issues so as to swiftly finalize the negotiations,” Luxembourg Prime Minister Jean-Claude Juncker said in an e-mailed statement today after leading a two-and-a-half-hour conference call with finance ministers. He said their scheduled Nov. 12 meeting in Brussels would “seek to conclude on the program.”
ArcelorMittal (MT) lost 6.4 percent to 11.43 euros after it said earnings before interest, taxes, depreciation and amortization dropped 44 percent to $1.34 billion, in line with the median analyst estimate of $1.3 billion.
The steelmaker also cut its 2013 dividend to save $1 billion as slowing Asian demand drags down prices and it attempts to cut debt. Next year’s payout will drop to 20 cents a share from the 75 cents planned for 2012.
BG Group tumbled 14 percent to 1,147.5 pence, the biggest drop since the shares started trading in 1988. The U.K.’s third- largest natural-gas producer forecast a 3 percent gain in full- year production growth this year and said 2013 output growth will be flat.
“This is a big disappointment as the market had expected the start of the volume growth phase,” a note from Canaccord Financial Inc. said.
BG also signed a deal with China National Offshore Oil Corp. for the sale of its interests in Australia’s Queensland Curtis LNG project for $1.9 billion and the sale of LNG from its global portfolio.
Clariant tumbled 8 percent to 9.97 Swiss francs as the maker of specialty chemicals lowered its full-year sales and profit forecasts after a “massive volume reduction in Europe.”
Clariant now sees sales measured in local currencies to be unchanged this year, compared with a July 25 forecast of sales growth and sustained profitability.
Barclays Plc (BARC) slid 4.7 percent to 227.5 pence. The bank today reported a 29 percent rise in third-quarter pretax profit to 1.73 billion pounds ($2.8 billion) and said it was the target of two more regulatory probes. Revenue from the fixed-income arm of its securities unit missed estimates.
Barclays said the Federal Energy Regulatory Commission is investigating its western U.S. power trading business between 2006 and 2008 and could issue a notice of penalties as soon as today. The Department of Justice and the Securities and Exchange Commission are also probing whether the group’s relationships with third parties who assist the bank to win or retain business comply with the Foreign Corrupt Practices Act.
Air France jumped 8.4 percent to 6.45 euros. Europe’s largest airline reported a 27 percent increase in third-quarter operating profit to 506 million euros as job cuts and improved summer traffic offset higher fuel costs. Analysts had predicted earnings of 434 million euros, based on the average of nine estimates.
Lufthansa rose 7.3 percent to 11.79 euros after Europe’s second-biggest airline posted a 6.2 percent increase in third- quarter operating profit to 648 million euros as a cost-savings program helped boost earnings. Analysts had estimated earnings of 522 million euros, based on nine estimates.
Fiat Industrial SpA (FI) climbed 3 percent to 8.36 euros. The truck and tractor manufacturer raised its 2012 sales target after reporting a 19 percent increase in third-quarter earnings before interest, taxes and one-time gains to 575 million euros. That beat the 505 million-euro average analyst estimate in a Bloomberg survey, amid higher demand for CNH farm equipment.
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