European stocks pared a weekly rally, erasing gains in the final hour of trading, after Ukraine said its troops partially destroyed a military convoy that entered the country from Russia.
SVG Capital Plc lost 4.5 percent after Permira Holdings Ltd. sold its entire stake in the company. BHP Billiton Ltd. climbed 1.2 percent after the world’s biggest mining company said it may spin off some assets. Hennes & Mauritz AB (HMB) advanced after posting a surge in sales last month.
The Stoxx Europe 600 Index fell 0.4 percent, the most in a week, to 329.72 at the close of trading in London, paring its weekly increase to 1.5 percent. The gauge had rallied as much as 0.9 percent earlier today. It has dropped 5.7 percent from a six-year high reached June 10 as U.S. President Barack Obama authorized air strikes against militants in Iraq and concern grew that fighting in Ukraine would disrupt world trade.
“The big issue for markets is proof of the credibility of those reports out of the crisis area,” Guillermo Hernandez Sampere, who helps manage 105 million euros ($141 million) at MPPM EK in Eppstein, Germany, wrote in an e-mail. “For weeks now we were getting news Russian troops would cross the border but these weren’t proved. Any escalation is driving investors to risk-off mode.”
Ukrainian military spokesman Andriy Lysenko told reporters in Kiev that government troops engaged the armed vehicles that had arrived overnight through a rebel-held section of the border. Ukrainian soldiers continue to come under shelling, including rounds fired from Russia, he said. Russia said it was concerned about an attack on another convoy carrying aid.
The Stoxx 600 climbed 1.9 percent this week through yesterday as companies from EON SE to Swiss Life Holding AG posted better-than-estimated earnings and weaker data on euro-area growth fueled speculation that the European Central Bank may need to increase stimulus. The index was heading for its biggest weekly gain of the year before erasing today’s rally.
National benchmark indexes fell in 11 of the 15 western European markets open today. France’s CAC 40 Index dropped 0.7 percent, and the DAX lost 1.4 percent. The U.K.’s FTSE 100 Index gained less than 0.1 percent
Markets in Greece, Italy and Austria were closed today for the Assumption Day holiday. The number of shares changing hands in Stoxx 600 companies was 36 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
SVG, an investment vehicle, slid 4.5 percent to 410 pence. Permira sold 12 million shares, or a 5.7 percent stake, for 390 pence each, according to a statement and deal terms obtained by Bloomberg News.
Carillion Plc lost 4 percent to 333.1 pence after Balfour Beatty Plc reaffirmed its rejection of a merger proposal. Carillion had met with Balfour Beatty’s major shareholders in an effort to resurrect a merger that Britain’s largest builder rejected this week.
BHP rose 1.2 percent to 2,050 pence. The company next week may announce a spinoff of assets estimated to be worth as much as $12 billion. Directors will consider a structure to focus BHP on its four main products, including iron ore and petroleum, according to a statement.
H&M climbed 0.7 percent to 289.8 kronor for its best week since September. Europe’s second-biggest clothing retailer said sales jumped 17 percent in July. That beat SME Direkt’s estimate for a 12 percent increase.
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