European Stocks Fall as Metals Slide; Yen Drops on G-20 Meeting

European stocks fell for a third day and German bunds rose amid speculation Italy’s election will fail to produce a clear winner. The yen weakened after the Group of 20 nations stepped back from censuring Japan over its currency policy. Metals declined.

The Stoxx Europe 600 Index lost 0.2 percent at the close. Standard & Poor’s 500 Index futures added 0.1 percent, with U.S. markets closed today for Presidents’ Day. Copper, nickel and aluminum dropped at least 1.1 percent. The yen slid 0.5 percent versus the dollar, while Japanese shares surged 2.1 percent. Platinum jumped after a shooting at a mine in South Africa. Brazil’s benchmark stock index fell to an 11-week low.

Leading candidates in Italy’s Feb. 24-25 election, including former Prime Minister Silvio Berlusconi, began campaigning ahead of the first parliamentary poll since the euro-region debt crisis threw its political establishment into disarray. G-20 finance ministers and central bankers ended talks in Moscow on Feb. 16 pledging not to “target our exchange rates for competitive purposes,” without singling out Japan, whose currency has tumbled 13 percent against the dollar in three months.

“European markets are getting influenced by anxiety about Italian elections,” Manish Singh, who helps manage $2 billion as the London-based head of investment at Crossbridge Capital, said by e-mail. “The G-20 communique has given tacit approval to currency manipulation and reflationary policies and therefore the yen will continue to weaken.”

European Central Bank President Mario Draghi said he urged finance chiefs from the Group of 20 nations to be prudent when talking about currency movements.

Carlsberg, Natixis

About three shares declined for every two that rose in the Stoxx 600, which posted its longest losing streak in a month. Carlsberg A/S tumbled 5.8 percent as the brewer scrapped its medium-term profitability goal. Natixis SA surged 22 percent, the biggest gain since August 2009, after the French investment bank said it plans a 2 billion-euro ($2.67 billion) payment to shareholders.

The yen fell against all 16 of its major peers, extending losses that made it the worst-performing major currency in the past three months. South Korea’s won climbed 0.3 percent to 8.679 yen, the highest since October 2008.

Japanese officials in Moscow denied driving down their currency, arguing that its weakness was a byproduct of their effort to revive the world’s third-largest economy, which would benefit trading partners. The yen may weaken toward 100 per dollar in the next few months, UBS AG said in a report.

Pound Weakens

Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. advanced more than 4 percent in Tokyo. The MSCI Asia Pacific Index gained 0.7 percent. The benchmark trades at 14 times estimated earnings compared with 13.6 for the S&P 500 and 12.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The MSCI Emerging Markets Index fell 0.2 percent to 1,063.94, snapping a four-day winning streak, while in Brazil the Bovespa index fell 0.5 percent after economists reduced their growth forecasts for 2014. Retailer B2W Cia. Global do Varejo fell 5.9 percent to its lowest in two months and real estate developer Brookfield Incorporacoes SA slumped 5 percent. Brazil’s real advanced 0.3 percent to 1.9633 per U.S. dollar.

The ECB’s Draghi warned that the latest euro-area data point to “economic weakness in the early part of 2013,” and that this is expected to be followed by “a very gradual recovery later in the year.” The euro weakened 0.1 percent to $1.3350.

The British pound fell 0.3 percent to $1.5465, the lowest level versus the dollar in more than seven months, after Bank of England policy maker Martin Weale said that U.K. exports may benefit from the currency’s decline.

Saudi Exports

Berlusconi had 27.8 percent support in an SWG Institute survey published Feb. 8, compared with 33.8 percent for Pier Luigi Bersani, his main rival.

German 10-year bund yields dropped two basis points to 1.63 percent. Equivalent-maturity Italian yields climbed two basis points to 4.40 percent.

Brent crude for March delivery fell 0.2 percent to $117.41 per barrel after a report from the Joint Organisations Data Initiative showed Saudi Arabia exported 7.06 million barrels of oil a day in December, the least since September 2011. WTI crude dropped 0.3 percent to $95.55 per barrel.

Industrial metals declined, with aluminum retreating 2.4 percent from a six-week high to $2,117 a metric ton. Copper fell 1.1 percent, while nickel slid 2.9 percent.

Spot Gold

Platinum rose 0.7 percent to $1,692.95 an ounce as police investigated reports that 13 people were injured in a clash between rival unions at Anglo American Platinum Ltd.’s Siphumelele mine in South Africa, the world’s biggest producer of the precious metal.

Spot gold fell less than 0.1 percent to $1,610.03 an ounce. Assets in exchange-traded products holding gold dropped 0.5 percent last week, the biggest decline in almost seven months after billionaires George Soros and Louis Moore Bacon cut their stakes in SPDR Gold Trust, the biggest fund backed by the metal.

EasTone Telecommunications Co. slid the most since July 24 in Taipei, leading losses, after Barclays Plc downgraded the stock. PT Bumi Resources surged 9.4 percent to the highest level since Aug. 24 after Nurhaida, a commissioner at Indonesia’s Financial Services Authority, said a change in ownership control of the company would require a tender offer.

To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

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