European stocks fell from a five-year high as the European Commission cut its growth forecast for the euro area and Bayerische Motoren Werke AG retreated after reporting results.
BMW, the world’s largest maker of luxury vehicles, slid the most in two months as profit declined. RSA Insurance Group Plc sank 6.3 percent as the U.K.’s biggest non-life insurer by market value said it will miss its profitability target after last week’s storms. Beiersdorf AG rose the most in a year after the maker of Nivea hand cream increased its sales forecast.
The Stoxx Europe 600 Index fell 0.2 percent to 321.89 at the close of trading. The benchmark gauge has still soared 15 percent in 2013 as the Federal Reserve maintained stimulus measures and the European Central Bank cut interest rates to a record low. The ECB will make its next announcement on monetary policy on Nov. 7.
“We have got some blurred economic signals here: not cold, not hot, but lukewarm,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said by phone. “This together with a backdrop of strong performance in equities over the past two weeks and year is not enough to support the liquidity-on rally.”
Bank of America Corp., UBS AG and Royal Bank of Scotland Group Plc forecast the ECB will cut its benchmark interest rate this week, according to a Bloomberg survey of 70 economists. The rest predict no change.
The executive arm of the European Union trimmed its forecast for euro-area growth next year as the economy struggles to gain momentum with the debt crisis dragging into a fifth year and unemployment at a record. Gross domestic product in the 17-nation currency bloc will rise by 1.1 percent in 2014, less than the 1.2 percent forecast in May.
The commission forecast that France’s budget deficit will be 3.7 percent of GDP in 2015, which would mean it misses a deadline to reduce the shortfall to 3 percent by then.
A U.S. government release on Thursday is forecast to show the world’s largest economy grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months. Economists predict a report the next day will show U.S. payrolls climbed by 120,000 in October, according to a separate survey.
“The U.S. non-farm payrolls at the end of the week will bring economic matters back in focus, following interest-rate decisions from the Bank of England and ECB where no changes are expected,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail.
National benchmark indexes fell in 14 of the 18 western European markets. The U.K.’s FTSE 100 (UKX) and Germany’s DAX lost 0.3 percent, while France’s CAC 40 retreated 0.8 percent.
BMW slid 2.9 percent to 81.20 euros, its biggest drop since Aug. 27. The automaker reported a 3.7 percent decline in third-quarter earnings before interest and taxes as spending on expansion offset stronger demand for the 3-Series sedan.
RSA plunged 6.3 percent to 121 pence, the largest slide in eight months, after saying wind damage in Europe and adverse weather in Canada will push return on equity below 10 percent for the year. That compares with a previous target range in August of 10 percent to 12 percent.
Orange SA (ORA), the phone company formerly known as France Telecom, retreated 3.9 percent to 9.75 euros as Bouygues SA unveiled a new Internet and calls package for 15.99 euros a month. The price is “particularly aggressive,” Jacques de Greling, an analyst at Natixis SA, wrote in a report.
Bouygues declined 3 percent to 28.24 euros, the largest retreat in two months. Orange said it has no plans to change its pricing structure.
Beiersdorf climbed 5.3 percent to 73.44 euros after saying sales will rise 6 percent to 7 percent this year. The Hamburg-based company had previously forecast revenue would increase 5 percent to 6 percent.
Marks & Spencer Group Plc (MKS), the U.K.’s largest clothing retailer, advanced 4.5 percent to 509 pence after reporting the smallest decline in general-merchandise sales in more than two years. Sales at stores open at least a year fell 1.3 percent in the quarter ended Sept. 28, M&S said. That beat the median estimate of 17 analysts for a 1.5 percent drop.
A gauge of mining companies rose the most among the 19 industry groups in the Stoxx 600. Anglo American Plc, owner of the world’s biggest platinum mine, gained 2.8 percent to 1,536 pence and Glencore Xstrata Plc, the world’s fourth-largest commodity producer, advanced 1.9 percent to 341.8 pence.
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