European stocks fell, paring their biggest weekly rally in five months, as companies from PPR (PP) SA to Total SA posted financial results that disappointed investors, while the U.S. economy grew at a slower-than-expected pace.
PPR slid the most since May 2009 after reporting first- quarter sales that missed analysts’ estimates as Gucci posted its weakest quarterly growth in more than three years. Total lost 1.4 percent after Europe’s third-largest oil producer said earnings fell. BASF SE rose 3.7 percent as the world’s biggest chemical maker posted profit that beat analysts’ projections.
The Stoxx Europe 600 Index slipped 0.3 percent to 295.89 at the close of trading in London, paring an earlier retreat of as much as 0.9 percent. The gauge has still gained 3.7 percent this week, its biggest rally since November 2012, as investors speculated that the European Central Bank will cut interest rates. The equity benchmark has risen 5.8 percent this year.
“We’ve seen markets well up this week, so a breather after such a massive rally is to be expected,” Mark Andersen, who helps oversee $1.7 trillion as co-head of asset allocation at UBS AG in Zurich, said in a telephone interview. “On the one hand, the market got excited about a possible rate cut by the ECB. On the other hand, quarterly results have reminded us that the European economy is not in a great spot.”
National benchmark indexes retreated in 15 of the 17 western-European markets that opened today. France’s CAC 40 dropped 0.8 percent and Germany’s DAX slipped 0.2 percent. The U.K.’s FTSE 100 declined 0.3 percent. Denmark’s equity market was closed for a national holiday.
A Commerce Department report in Washington showed that the U.S. economy grew at a slower pace in the first quarter than estimated. Gross domestic product rose at a 2.5 percent annualized rate, compared with the 3 percent economists had forecast in a Bloomberg survey. The world’s largest economy expanded 0.4 percent in the final three months of 2012.
The ECB holds its next interest-rate setting meeting on May 2. Forty three of 69 economists in a Bloomberg News survey have predicted that the central bank will lower its benchmark rate to 0.5 percent from 0.75 percent.
PPR slumped 6.7 percent to 166.50 euros after posting first-quarter sales from continuing operations that climbed 1 percent to 2.37 billion euros ($3.1 billion). That missed the 2.41 billion-euro average analyst estimate in a Bloomberg survey. PPR said revenue at its sports and lifestyle businesses dropped, especially in western Europe.
Total declined 1.4 percent to 37.55 euros as the oil company said earnings slid 7 percent because of losses from a canceled Canadian oil-sands project and lower output. Profit (FP) excluding changes in inventories fell to 2.9 billion euros in the first quarter, in line with the 2.92 billion-euro average estimate of 14 analysts surveyed by Bloomberg. Total made a 3.1 billion-euro profit a year earlier.
Ziggo NV (ZIGGO) slid 4.1 percent to 26.70 euros. Warburg Pincus LLC and Cinven Ltd. sold their remaining 17 percent in the Dutch cable company, according to a statement. The two shareholders sold the securities for 25.75 euros apiece, which was a 7.5 percent discount to yesterday’s closing price.
Anheuser-Busch InBev NV (ABI) fell 2.8 percent to 71.90 euros, contributing the most to the Stoxx 600’s slide. The brewer said it will shortly start its tender offer for the Grupo Modelo SAB shares that it does not already own. Separately, Goldman Sachs Group Inc. added the stock to its conviction sell list.
A gauge of European mining companies posted the worst performance on the Stoxx 600. Xstrata Plc and Glencore (GLEN) International Plc dropped 2.5 percent to 979.9 pence and 3.5 percent to 319.35 pence, respectively. Glencore will become the world’s fourth-biggest mining company when it completes the acquisition of Xstrata next month.
YIT Oyj (YTY1V) plunged 8 percent to 15.03 euros, its biggest slump since October 2011. Finland’s biggest residential developer posted first-quarter net income of 25.1 million euros, missing the 39.2 million-euro average analyst projection.
BASF climbed 3.7 percent to 72.59 euros after first-quarter earnings before interest, taxes and one-off items increased 10 percent to 2.21 billion euros. That compared with the average analyst estimate that had called for 2.09 billion euros.
Vinci SA (DG) added 3.4 percent to 36.71 euros, its largest advance in seven months, as Goldman Sachs said the company’s first-quarter results beat expectations and supported upgrades. Europe’s biggest builder said sales rose 3.4 percent to 8.4 billion euros.
DNB ASA (DNB) advanced 5.2 percent to 92.50 kroner after Norway’s biggest bank said first-quarter net income amounted to 3.18 billion kroner ($543 million), exceeding the 2.76 billion kroner that analysts had estimated.
National Bank of Greece SA surged 8.2 percent to 76.9 euro cents. The lender plans to raise 12 percent of its recapitalization needs from private investors, up from a previous target of 10 percent.
The volume of shares changing hands in Stoxx 600 companies was 28 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
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