European stocks declined for the fourth time in five days amid speculation that this month’s rally may have overshot the outlook for economic growth.
Actelion Ltd., the largest Swiss biotechnology company, sank 8 percent after its clazosentan medicine didn’t meet the main goal of a study. Vestas Wind Systems A/S, the world’s largest maker of wind turbines, slid 3.8 percent as Financial Times Deutschland reported that Germany has scrapped provisions for funding energy programs. Unilever increased 1.3 percent after agreeing to buy Alberto Culver Co. for $3.7 billion.
The benchmark Stoxx Europe 600 Index lost 0.4 percent to 262.92 at the 4:30 p.m. close of trading in London after earlier rising as much as 0.5 percent. The measure has surged 68 percent since March 2009 amid speculation that stimulus measures by governments around the world will cement the recovery from the first global recession since World War II.
“There will inevitably be some disappointment -- either in the form of poor economic or earnings data, or signals that quantitative easing will be deferred,” David Shairp, a global strategist at JPMorgan Asset Management in London, wrote in a report today. “It probably suggests that, short term, a little risk could be taken off the table.”
The Stoxx 600 has rallied 4.6 percent in September and 8.1 percent so far this quarter as investors speculated that the economy will continue to grow even as European nations slash spending to control their budget deficits and China takes steps to cool growth.
National benchmark indexes declined in 15 of the 18 western European markets today. France’s CAC 40 fell 0.4 percent and Germany’s DAX lost 0.3 percent. The U.K.’s FTSE 100 retreated 0.5 percent
New York University Professor Nouriel Roubini said there’s a high probability of another U.S. recession, with Japan’s outlook “anemic,” underscoring risks to the global recovery.
China, the world’s fastest-growing major economy, may face greater headwinds should there be weak growth in the U.S. and Europe, Roubini said in Kuala Lumpur today, where he was attending a conference. Second-quarter gross domestic product figures for the U.S. are likely to be revised lower after “awful” June real-estate numbers, he also said.
Japan is considering compiling a stimulus package totaling as much as 4.6 trillion yen ($54.6 billion) that will be funded with existing revenue, a government official said on condition of anonymity.
“Central banks remain accommodative,” Mislav Matejka, the head of pan-European equity strategy at JPMorgan Chase & Co. wrote in a report today. “We find the backdrop for stocks still constructive.”
Two years after the collapse of Lehman Brothers Holdings Inc., investors still aren’t willing to pay more than liquidation value for banks in developed nations. Bears say the combination of slowing economic growth, the weak U.S. housing market and increasing regulation mean bank profits will be limited and bad loans may increase.
The KBW Bank Index trades at 95 percent of book value, a level never seen before 2008, while stocks of lenders in Europe and Japan are also lower than their assets minus liabilities. Financial firms in the Standard & Poor’s 500 Index have risen 6 percent this quarter, the smallest gain for any industry and about half the return for the gauge of American equities.
Actelion, Switzerland’s largest biotechnology company, sank 8 percent to 40 Swiss francs after saying its clazosentan medicine didn’t meet the main goal of a study in patients who had suffered from bleeding in the brain.
AstraZeneca Plc declined 1.6 percent to 3,280 pence as its experimental cancer treatment zibotentan also missed a main study goal after failing to help patients with a kind of prostate tumor live longer.
Vestas slipped 3.8 percent to 202.1 kroner. The German government has scaled back its energy and climate change plan, scrapping provisions for some carbon dioxide emissions cuts and money for energy programs, Financial Times Deutschland reported.
Unilever gained 1.3 percent to 1,816 pence in London as the maker of Dove shower gel agreed to buy Alberto Culver to add VO5 and Nexxus to become the world’s largest maker of hair-conditioning products.
Micro Focus International Plc climbed 5.3 percent to 385.2 pence, the biggest gain in the Stoxx 600, as Barclays Plc rated the U.K. maker of business software “buy” in new coverage.
Latecoere SA rallied 15 percent to 7.15 euros. Spirit Aerosystems Holdings Inc., the airplane component maker spun off from Boeing Co. in 2005, is mulling a bid for Toulouse, France- based Latecoere, Le Figaro said. Officials from Wichita, Kansas- based Spirit will meet Latecoere Chairman Pierre Gadonneix to discuss a tie-up, the French daily newspaper reported, without giving a date for the meeting or citing anybody.
Pernod Ricard SA rose 1.9 percent to 60.45 euros. The company had an increase in summer sales of 7 percent versus 2008, La Lettre de L’Expansion reported, without citing anyone. Pernod Ricard benefited from a recovery in demand in cafes, hotels and restaurants, according to the weekly newsletter, which didn’t define the dates of the summer period.