European stocks fell to a two-week low as euro-area finance ministers met to discuss Greek aid and concern grew that impending U.S. tax increases and spending cuts will harm the world’s biggest economy.
Alpha Bank SA led Greek banks lower as the nation’s creditors said the country may face a 15 billion-euro ($19 billion) financing gap. Cobham Plc slid 9.7 percent after the world’s largest maker of airborne-refueling equipment forecast weaker revenue and profitability. Telecom Italia SpA rose 4.2 percent as Egyptian billionaire Naguib Sawiris offered to purchase a stake in the company.
The Stoxx Europe 600 Index slipped 0.3 percent to 269.53 at the close of trading, having swung between gains and losses at least 25 times. The gauge has fallen for four straight days since Barack Obama’s re-election as U.S. president focused investor attention on the so-called fiscal cliff. That’s the longest losing streak in more than three months.
“Until there is clarity on the fiscal cliff, markets will be nervous,” said Nicolaas Marais, head of multi-asset investments and portfolio solutions at Schroders Plc in London, which oversees $320 billion. “There is a commitment to solve the issues, but markets will have a wait-and-see mode and be very cautious until that is in place. Between the fiscal cliff and some of the challenges in Greece, you are in a risk-off mode at the moment.”
The Stoxx 600 has rallied 15 percent from this year’s low on June 4 as European Central Bank President Mario Draghi said he would do everything to protect the euro and the Federal Reserve opted for a third round of asset purchases. The volume of shares in the index changing hands today was 18 percent lower than the 30-day average, Bloomberg data show.
National benchmark indexes fell in 12 of the 18 western-European markets today. France’s CAC 40 dropped 0.4 percent, while Germany’s DAX and the U.K.’s FTSE 100 were little changed.
Greece’s ASE sank 3.6 percent as Alpha Bank tumbled 14 percent to 1.56 euros. National Bank of Greece SA, the nation’s largest lender, lost 14 percent to 1.51 euros.
Plans to give Greece extra time to meet deficit-cutting targets would open up a financing gap of about 15 billion euros through 2014 and 17.6 billion euros in the two following years, the country’s creditors said. The so-called troika of the European Commission, ECB and International Monetary Fund supplied the estimates for tonight’s meeting of euro-area finance ministers in Brussels, according to a document obtained by Bloomberg News.
Greek Prime Minister Antonis Samaras won a vote on Greece’s 2013 budget, with 167 lawmakers for and 128 against. The nation’s fiscal plan, which forecasts a deficit of 5.2 percent of gross domestic product and a sixth year of contraction, is designed to regain the confidence of its euro-area and IMF creditors.
Japan’s third-quarter gross domestic product fell an annualized 3.5 percent, the most since the earthquake and tsunami in early 2011, the Cabinet Office said. The median of 23 estimates in a Bloomberg survey was for a 3.4 percent drop.
In China, new yuan loans unexpectedly declined in October from a year earlier, damping signs the world’s second-biggest economy is recovering after a seven-quarter slowdown. Banks extended 505.2 billion yuan ($81.1 billion) of local-currency loans, the People’s Bank of China said. The median estimate was 590 billion yuan in a Bloomberg News survey of 28 analysts.
European stocks most dependent on revenue from Spain, Italy, Greece and Portugal are rising at the fastest pace in five years, providing chances for short sellers after two earlier rallies fizzled.
Firms with sales from those countries surged 21 percent in the 15 weeks to Nov. 2, compared with an average 5.3 percent gain for exporters to the U.S., China and Europe’s strongest economies, Goldman Sachs Group Inc. indexes show. Similar rallies for companies serving so-called peripheral countries heralded losses of as much as 44 percent through November 2010 and July 2012, data compiled by Bloomberg show.
Cobham slid 9.7 percent to 190.6 pence, the biggest slide since at least 1989. The company said sales next year will drop “organically by low-to-mid single digits” with “slightly lower operating margins” as U.S. defense revenue declines.
Davide Campari-Milano SpA dropped 5.9 percent to 5.86 euros after the maker of Wild Turkey bourbon reported earnings that missed estimates. Third-quarter profit before interest and taxes and excluding one-time items was 66.5 million euros, according to Bloomberg calculations based on the company’s six-month statement. That missed the 72.3 million-euro average forecast of eight analysts compiled by Bloomberg.
Invensys Plc, which makes software that runs London Underground trains, fell 5.7 percent to 221.3 pence. The stock was downgraded to neutral from buy at UBS AG.
Telecom Italia climbed 4.2 percent to 72 euro cents. Italy’s former phone monopoly received interest from Sawiris, founder of Orascom Telecom Holding SAE, about an investment “through underwriting of new stock,” the Milan-based company said today. The offer is valued at more than 2 billion euros, said a person familiar with the matter, asking not to be identified because the discussions are confidential.
Banco Popular Espanol SA surged 4.6 percent to 1.17 euros as the Spanish bank said it plans to sell as much as 2.5 billion euros of discounted shares to close a capital shortfall.
Opap SA, Greece’s largest gambling company, gained 1.3 percent to 4.76 euros. The Hellenic Republic Asset Development Fund said it received eight expressions of interest for the 33 percent stake in the company held by the Greek state.
Deutsche Wohnen AG rose 1.3 percent to 14.11 euros, the first advance in six days, as nine-month earnings more than doubled after Germany’s largest residential landlord by market value added apartments and sold others at a profit.
Publicis Groupe SA climbed 1.7 percent to 41.80 euros. The world’s third-largest advertising company said so-called organic revenue growth in October rose by more than 7 percent, helped by growth in the U.S.