European Stocks Decline; Repsol, Santander Retreat

European Stocks Decline; Repsol Retreats
Repsol YPF SA lost 1.9 percent after Argentina rejected a demand for $10.5 billion in compensation for its YPF SA unit. Photographer: Angel Navarrete/Bloomberg

European stocks declined as Bank of England policy maker Adam Posen ended his support for more stimulus, falling house prices signaled slowing growth in China and bad loans surged in Spain.

Banco Santander SA led banks lower. Repsol YPF SA retreated after Argentina rejected a demand for $10.5 billion in compensation for its YPF SA unit. Iberdrola SA dropped to an eight-year low after Actividades de Construccion & Servicios SA sold a stake in Spain’s biggest power company. Statoil Fuel & Retail ASA soared 51 percent after Alimentation Couche-Tard Inc. offered to buy the company.

The Stoxx Europe 600 Index dropped 0.7 percent to 257.71 in London. The benchmark gauge has lost 2.1 percent so far in April on renewed concern that the region’s sovereign-debt crisis will worsen. The Stoxx 600 has still advanced 5.4 percent so far this year.

“The debt crisis is far from over still and I think Spain will be worse before it gets better,” Henrik Drusebjerg, a senior equity strategist at Nordea Bank AB in Copenhagen, said in a Bloomberg Television interview with Maryam Nemazee. “European leaders need to address the key issues to move Europe out of this crisis and that is how to create growth under this environment and that has been almost unaddressed so far during this crisis.”

Bank of England

Posen ended his push for further Bank of England stimulus, joining the majority of the nine-member Monetary Policy Committee in seeking no change to the 325 billion-pound ($517 billion) asset-purchase target, according to minutes of their April 4-5 meeting published today in London.

While officials noted the U.K. may face a recession in the first half of this year, they said inflation might pose more of a danger than previously anticipated.

China’s home prices fell in a record 37 of 70 cities tracked by the government in March as officials pledged to keep restrictions on property purchases that have sapped buyer demand. Foreign direct investment into the country sank for a fifth month, while the economy expanded 8.1 percent in the first quarter, the slowest pace in almost three years.

Non-performing loans for Spanish banks as a proportion of total lending jumped to 8.16 percent in February, the highest level since 1994, from less than 1 percent in 2007, according to Bank of Spain data. The total credit in the economy that the regulator lists as “doubtful” reached 143.8 billion euros.

National benchmark indexes fell in 15 of the 18 western-European markets. France’s CAC 40 Index declined 1.6 percent and the U.K.’s FTSE 100 Index slid 0.4 percent. Germany’s DAX Index lost 1 percent. Spain’s IBEX 35 Index retreated 4 percent to its lowest since March 2009.

Spanish Bank Shares

Santander, Spain’s largest bank, dropped 4 percent to 4.81 euros. Banco Popular Espanol SA fell 3.2 percent to 2.39 euros. CaixaBank slid 3.5 percent to 2.60 euros. A gauge of European bank shares was the second-worst performer of the 19 industry groups on the Stoxx 600.

Repsol dropped 6.2 percent to 15.40 euros. Argentina rejected its demand for $10.5 billion in compensation after President Cristina Fernandez de Kirchner seized its YPF SA unit, saying it hasn’t invested enough in the South American country.

Iberdrola dropped 7.9 percent to 3.59 euros, its lowest since November 2003, after Actividades de Construccion & Servicios SA sold a 3.7 percent stake in Spain’s biggest power company to cut debt. ACS tumbled 6.1 percent to 16.45 euros as it said the stake sale will reduce its earnings by 540 million euros.

ASML Holding, Aixtron

ASML Holding NV, Europe’s biggest semiconductor equipment maker, fell 1.6 percent to 37.33 euros, after failing to provide forecasts for future orders.

Aixtron SE, whose machines help make high-intensity lights, slid 3 percent to 13.62 euros after industry peer Cree Inc. missed earnings estimates.

Marine Harvest ASA slipped 5.7 percent to 2.77 kroner as the world’s largest salmon farmer said operational earnings before interest and tax fell to about 270 million kroner ($47 million) in the first quarter, from 963 million kroner a year earlier.

Syngenta slid 2.6 percent to 315.30 Swiss francs, the biggest drop since March 6, even as first-quarter sales rose 7 percent to $4.3 billion. Analysts in a Bloomberg survey had predicted $4.33 billion, according to their mean estimate. Chief Financial Officer John Ramsay said that the company’s target for increasing prices this year remains 2 to 3 percent. They gained 4 percent in the first quarter.

Statoil Fuel Bid

Statoil Fuel & Retail soared 51 percent to 52.60 kroner. Alimentation Couche-Tard offered to buy the company for 53 kroner per share, valuing it at 15.9 billion kroner ($2.8 billion). The offer represents a 53 percent premium for Scandinavia’s biggest gas-station operator, the Laval, Canada-based company said in a statement today. Statoil ASA, Norway’s biggest oil producer, has agreed to sell its 54 percent stake in the company.

BHP Billiton added 0.9 percent to 1,943 pence, gaining for a third day. The world’s largest mining company said third-quarter iron ore production rose 14 percent as it expands its mines and port in Australia.

Output of the steel-making raw material, its biggest earning unit, was 37.9 million metric tons in the three months to March 31. That compares with the median estimate of 37.3 million tons from four analysts compiled by Bloomberg.

Heineken NV advanced 2.5 percent to 43.35 euros after reporting first-quarter revenue of 3.83 billion euros, beating analysts’ estimates of 3.74 billion euros.

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