Barclays Plc (BARC) dropped the most in almost five months as Qatar Holding LLC disposed of its remaining warrants in the U.K. lender. ThyssenKrupp AG (TKA) slid 5.1 percent after Credit Suisse Group AG lowered its recommendation on Germany’s largest steelmaker. Straumann Holding AG rose 2.3 percent after Government of Singapore Investment Corp. increased its stake in the maker of dental implants to 14 percent.
The Stoxx 600 lost 0.5 percent to 272 at the close in London, falling for the first time in six days. The gauge jumped 4 percent last week as optimism grew that Congress will agree on a U.S. budget that avoids automatic tax increases and spending cuts, and data showed China’s manufacturing expanded.
“After last week’s unbroken gains, it’s natural to have a little breather,” said Jakup Petur Baerentsen, chief equity adviser at Nordea Private Bank in Copenhagen. “The markets have started to turn upwards again after a long period of doing not very much. Of course, the political risks remain, both in Europe and also anything coming out on the U.S. fiscal cliff.”
Euro-area finance ministers meet in Brussels to try to clear the next installment of Greek aid and discuss ways to keep the country a solvent member of the currency bloc. They failed to reach agreement in two previous meetings this month.
“It would be irresponsible not to reach an accord given all the efforts that have been made on all sides,” French Finance Minister Pierre Moscovici said late yesterday on BFM television. “I’m not going to guarantee that an accord will be reached, but I think the third time should be the charm.”
Pro-independence parties in the Spanish region of Catalonia won a vote, strengthening a drive for a referendum on secession in defiance of Prime Minister Mariano Rajoy.
Catalan President Artur Mas, who called early elections to force a debate on independence, lost a fifth of the seats his Convergencia i Unio party held previously. Mas’s losses showed he will have to depend on anti-austerity separatists to govern Spain’s largest regional economy.
In the U.S., Congress returns from the Thanksgiving recess this week, seeking a budget deal to avoid $607 billion of automatic tax increases and spending cuts from kicking in next year. While Republicans favor raising federal tax revenue by limiting deductions, Democrats have pushed for higher rates on upper-income earners.
The Congressional Budget Office has said a failure to avoid the so-called fiscal cliff could lead to a recession and a jobless rate of about 9 percent, compared with the October rate of 7.9 percent.
National benchmark indexes fell in 16 of the 18 western European markets. France’s CAC slid 0.8 percent, Germany’s DAX dropped 0.2 percent and the U.K.’s FTSE 100 lost 0.6 percent.
European stocks are trading at levels that show investors anticipate no profit growth for 2013, increasing optimism among strategists who say equities will rise to a five-year high.
The Stoxx 600 (SXXP) is priced at 11 times estimated profit, down from 13 before the financial crisis, according to data compiled by Bloomberg. Even though the region entered a recession last quarter, earnings will climb almost 5 percent next year, according to the average of seven strategist forecasts in a Bloomberg survey. They predict the gauge will gain 10 percent to the highest level since 2008.
Barclays fell 5.4 percent to 240.5 pence, the sharpest decrease since June 28. Qatar Holding LLC sold the last of the Barclays warrants it acquired during the financial crisis, triggering a 771 million-pound ($1.24 billion) stock offering by the banks that arranged the transaction.
Deutsche Bank AG and Goldman Sachs Group Inc. sold as many as 303.3 million shares in the British bank to money managers for 244 pence apiece, the bottom of the 244 pence to 248 pence range used to canvas investor interest in the stock, according to a term sheet obtained by Bloomberg News.
ThyssenKrupp, Germany’s largest steelmaker, dropped 5.1 percent to 15.93 euros, the biggest slump since March 6. The sale of its Americas unit has been delayed until September 2013, Financial Times Deutschland reported, following a similar report by Sueddeutsche Zeitung last week. Separately, the stock was downgraded to neutral from outperform at Credit Suisse. An outperform rating is similar to a buy recommendation.
Lafarge SA, (LG) the world’s biggest cement maker, lost 2.4 percent to 43.61 euros amid political instability in Egypt. The company gets almost a fourth of its revenue from the Middle East and Africa.
Straumann added 2.3 percent to 107.90 Swiss francs, rallying for a seventh day. Singapore’s GIC bought a 10 percent stake in the company from Vice Chairman Thomas Straumann, (STMN) becoming the second-largest shareholder.
Royal KPN NV (KPN), the former Dutch phone monopoly, gained 4.5 percent to 4.48 euros. The stock was raised to buy from neutral at Bank of America Corp.
Deutsche Lufthansa AG (LHA), Europe’s second-largest airline climbed 3 percent to 12.96 euros as Banco Espirito Santo SA raised its rating on the stock to buy from neutral.
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