European stocks fell to their lowest level in more than five weeks, extending their second weekly loss, as investors awaited a referendum that may lead to Crimea’s secession from Ukraine.
Bouygues SA dropped 2.9 percent after France’s industry minister said that Vivendi SA prefers a competing offer for its SFR phone unit. Pandora A/S lost 2.9 percent as shareholders agreed to sell a stake worth 4.51 billion kroner ($838 million). Banca Monte dei Paschi di Siena SpA (BMPS) rose 2 percent after a report that JC Flowers & Co. is interested in buying a stake in the Italian lender.
The Stoxx Europe 600 Index retreated 0.7 percent to 322.23 at the close of trading, for a third day of declines. The benchmark gauge has fallen 3.3 percent this week as Russia and Ukraine continued their standoff over Crimea, and China reported worse-than-expected economic data.
“Markets are nervous because we’ve got two catalysts,” Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin, said by telephone. “First, we have the Crimean crisis and people are going to be watching the referendum. Second, there are now signs China’s recovery will be more difficult than previously thought. It’s hard to figure out what will happen next, so investors are in a risk-off mode and have become defensive.”
The number of shares changing hands today in Stoxx 600-listed companies was 35 percent greater than the 30-day average, according to data compiled by Bloomberg.
The VStoxx Index, which measures expected volatility on the Euro Stoxx 50 Index using options prices, jumped 5.1 percent to 23.21, the highest level in more than a month.
National benchmark indexes fell in 16 of the 18 western European markets today. Germany’s DAX added 0.4 percent, France’s CAC 40 slid 0.8 percent, and the U.K.’s FTSE 100 lost 0.4 percent.
The Black Sea region of Crimea votes March 16 on whether to leave Ukraine and rejoin Russia. Secretary of State John Kerry warned Russia that the U.S. and Europe could take serious action after the referendum should there be no sign of a resolution to the crisis.
Russian Foreign Minister Sergei Lavrov said after talks with Kerry today in London that his country has no plans to invade the region and will respect the outcome of the Crimean referendum.
Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Nomura Holdings Inc. lowered forecasts for China’s 2014 economic expansion after reports showed yesterday that factory output rose in January and February at the slowest pace since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004.
Bouygues dropped 2.9 percent to 30.51 euros. French Industry Minister Arnaud Montebourg told Europe1 radio station that Vivendi, weighing competing offers for SFR, prefers a bid from billionaire Patrick Drahi’s cable holding Altice SA to Bouygues’s offer. Altice jumped 7.4 percent to 30 euros and its Numericable Group SA unit soared 12 percent to 29.50 euros.
Iliad SA fell 4.1 percent to 201.40 euros. To address concerns that an acquisition of SFR would reduce competition, Bouygues agreed to sell some wireless spectrum and its transmission network to Iliad. The deal is subject to its SFR bid going through.
Pandora, the Danish maker of charm bracelets, fell 2.9 percent to 348.80 kroner. Funds managed by Danish private-equity firm Axcel, Pewic Holding ApS and Christian Algot Enevoldsen offered 13 million shares in the transaction, according to a statement from JPMorgan, which is managing the sale along with Goldman Sachs Group Inc. and Nordea Bank AB. Pandora shares have more than doubled over the past year.
HeidelbergCement AG declined for a third day, dropping 1.9 percent to 59.52 euros. Berenberg Bank cut its rating on construction stocks including the German cement maker to hold from buy, meaning it no longer recommends acquiring the shares. Berenberg cited stock price increases for the downgrade.
HeidelbergCement climbed to its highest price since October 2008 on March 6. A gauge of building-related companies rose 18 percent in the past 12 months, compared with the Stoxx 600’s 7.9 percent increase.
Holcim Ltd., also downgraded to hold, lost 1.7 percent to 69.50 Swiss francs. Lafarge SA declined 2.8 percent to 52.31 euros, after Berenberg recommended investors sell the shares.
Monte dei Paschi
Monte dei Paschi added 2 percent to 23.2 euro cents. JC Flowers, a U.S. private-equity firm, is interested in taking a stake in Italy’s third-biggest bank as a long-term investor, Il Messaggero newspaper reported, without citing anyone.
Fresenius SE gained 3.2 percent to 108.35 euros. The health-care company said it will propose a stock split at a May 16 annual general meeting, tripling the number of shares. Holders will get two new shares for every one owned.
Fresenius Medical Care AG advanced 1.7 percent to 48.28 euros. Redburn Partners LLP recommended buying the stock, raising its rating from neutral. The brokerage said it expects cost savings will double to $120 million by 2017. Fresenius SE owns 31 percent of Fresenius Medical Care, according to data compiled by Bloomberg.
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