Europe Stocks Slip After Fed Talks, China Manufacturing

European shares declined as a gauge of China manufacturing dropped more than forecast and minutes from the Federal Reserve’s last meeting signaled the U.S. may reduce stimulus in coming months.

Atos (ATO) fell 4.1 percent after an investor cut its stake in the company. Intermediate Capital Group Plc (ICP) lost 3.4 percent after Numis Securities Ltd. lowered its rating on the money manager. Allianz SE (ALV) fell 1.3 percent after Europe’s biggest insurer was cut to neutral at Citigroup Inc. Johnson Matthey Plc (JMAT) climbed 3.8 percent after reporting a profit increase in the first half of the year.

The Stoxx Europe 600 Index lost 0.2 percent to 322.42 at the close of trading. The gauge, which has rallied 15 percent this year, is poised for its first weekly drop in seven weeks.

“There’s been a lack of conviction and momentum in the European market,” Michael Ingram, a market strategist at BGC Partners LP in London, said by telephone. “March is still likely in terms of the timing of a taper, but this has been a movable feast. The data doesn’t support a taper yet.”

National benchmark indexes retreated in nine of the 18 western European markets. The U.K.’s FTSE 100 and Germany’s DAX were little changed. France’s CAC 40 dropped 0.3 percent.

The Fed expected economic data to signal improvement in the job market and “would thus warrant trimming the pace of purchases in coming months,” minutes of the U.S. central bank’s Oct. 29-30 meeting showed yesterday in Washington.

March Meeting

As of Nov. 19, four of five investors expected the Fed to delay a decision on the first cuts to bond buying until March 2014 or later, with 5 percent looking for a move next month, according to the latest Bloomberg Global Poll. Only one in 20 said the central bank will begin to reduce its purchases at its Dec. 17-18 meeting, according to the poll yesterday of investors, traders and analysts who are Bloomberg subscribers.

Equities pared earlier declines of as much as 0.7 percent as a report indicated fewer Americans than forecast filed claims for jobless benefits. Unemployment claims in the week ended Nov. 16 dropped by 21,000 to 323,000, the fewest since the period ended Sept. 28, from a revised 344,000 the previous week, the Labor Department said today in Washington.

A gauge of China’s manufacturing activity declined for the first time in four months. The preliminary 50.4 reading for the November Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compared with a 50.8 median estimate from analysts surveyed by Bloomberg News. Levels above 50 indicate expansion.

Euro-Area Manufacturing

In the euro-area, an index based on a survey of purchasing managers in the manufacturing industry rose to a 29-month high this month of 51.5 from 51.3 in October, London-based Markit Economics said today. An index of French manufacturing PMI unexpectedly declined to 47.8 from 49.1. Economists in a Bloomberg survey had predicted an increase to 49.5.

“PMIs confirmed the fear that has been nagging that the momentum in European real economies is petering out,” BGC Partners’ Ingram said. “France in particular has returned as a concern within the core of Europe. There is a worry that growth isn’t coming through.”

A separate report showed that an index of household confidence in the region fell to minus 15.4 from minus 14.5 in October, the European Commission said in a preliminary report. The median forecast in a Bloomberg News survey of 27 economists was for an increase to minus 14.

Atos dropped 4.1 percent to 61.70 euros for the biggest loss since June 2012. Shareholder PAI Partners SAS is selling 8.9 million shares in the French company for 61.25 euros each.

Intermediate Capital

Intermediate Capital lost 3.4 percent to 445 pence after it was cut to hold from add at Numis, which said that half-year results were weaker than expected. The London-based money manager reported first-half pretax profit rose to 155.3 million pounds ($250 million) from 39.6 million pounds in the same period a year earlier. The company’s assets under management shrank 6 percent to 12.1 billion euros.

Intermediate Capital and Nomura Holdings Inc. agreed to set up a mezzanine debt fund in Japan, citing increased demand as the world’s third-largest economy recovers.

Allianz fell 1.3 percent to 126.85 euros. Europe’s biggest insurer was cut to neutral from buy at Citigroup, which says earnings growth is limited.

Tobacco Companies

British American Tobacco Plc (BATS) declined 2.4 percent to 3,281 pence, and Imperial Tobacco Group Plc (IMT) lost 2.6 percent to 2,367 pence. Philip Morris International Inc., the world’s largest publicly traded tobacco company, said yesterday international cigarette volume may drop as much as 3 percent next year.

Johnson Matthey rose 3.8 percent to 3,210 pence, the highest price since at least May 1989. The producer of a third of all auto catalysts used to cut vehicle pollution said first-half underlying pretax profit climbed to 202.1 million pounds from 180.1 million pounds a year ago. Revenue jumped to 6.41 billion pounds from 4.89 billion pounds last year.

Daily Mail & General Trust Plc (DMGT) climbed 2.6 percent to 862.5 pence. The company said contribution from national newspapers to the group’s revenue dropped to 36 percent this year from 43 percent in 2012 and will fall further. The publisher of Britain’s second-biggest U.K. daily newspaper forecast full-year revenue will be 1.8 billion pounds, matching analysts’ estimates.

Actelion Ltd. (ATLN) gained 1.8 percent to 75.55 Swiss francs. The biotechnology company is “an intriguing potential target” for AstraZeneca Plc, Andrew Baum, an analyst at Citigroup Inc., wrote in a note today.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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