European stocks were little changed near a five-year high as services and manufacturing output shrank for a 15th month while European Central Bank President Mario Draghi said policy makers are ready to cut interest rates if needed.
GDF Suez SA led a gauge of utilities lower, dropping 1.5 percent. Linde AG rallied the most in eight months after the German industrial-gas maker reported quarterly profit that beat analysts’ estimates. Celesio AG climbed the most since 2011 after Franz Haniel & Cie GmbH said it won’t sell its stake in the drug wholesaler.
The Stoxx Europe 600 Index slipped less than 0.1 percent to 300.97 at the close of trading, having earlier fallen 0.2 percent. Volume was 67 percent less than the 30-day average as markets in the U.K., Ireland and Greece were closed for holidays, according to data compiled by Bloomberg.
“The thing that is crystal clear in the U.K., the U.S. and in Europe is a rotation into defensive sectors, which is one clue that the bull market itself is a little bit tired and is looking to pause for breath,” Simon Goodfellow, founder of Harlyn Research LLP, told Anna Edwards on Bloomberg Television in London. “We’re due for an injection of macro-political risk at some stage in the next few months. I’d be very surprised if we didn’t get that.”
The Stoxx 600 closed at the highest level since June 2008 last week as the European Central Bank cut interest rates and a U.S. jobs report bolstered confidence in the world’s largest economy. The gauge has advanced 7.6 percent this year.
Euro-area services and factory output shrank for a 15th straight month in April. A composite index based on a survey of purchasing managers in both industries rose to 46.9 from 46.5 in March, London-based Markit Economics said today in a final reading. Figures below 50 signal a contraction.
Retail sales in the region fell 0.1 percent in March after a revised 0.2 percent drop in February, the European Union’s statistics office in Luxembourg said in a separate report.
Stocks pared losses as Draghi said ECB policy makers are ready to cut interest rates again if needed after reducing them to a record low last week.
“We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said in a speech in Rome today. “Monetary policy will remain accommodative.”
Bearish options on an exchange-traded fund that derives most of its value from European equities are trading at the lowest prices in more than four years, a sign investors are confident the sovereign-debt crisis will recede.
Puts protecting against a 10 percent drop in the iShares MSCI EAFE Index Fund cost 5.79 points more than calls betting on a 10 percent increase on May 3, according to three-month data compiled by Bloomberg. That’s the lowest since October 2008.
National benchmark indexes climbed in eight of the 15 western European markets open today. France’s CAC 40 lost 0.2 percent, while Germany’s DAX declined 0.1 percent.
A gauge of utilities sank the most of the 19 industry groups in the Stoxx 600 as GDF Suez, Europe’s largest utility, lost 1.5 percent to 16.49 euros in Paris trading.
Air France-KLM Group fell 4.3 percent to 7.31 euros for the biggest decline in the Stoxx 600. Europe’s largest airline sank 4.5 percent on May 3 after reporting a loss.
Rheinmetall AG, the maker of armored military vehicles, slipped 1.5 percent to 37 euros in Frankfurt after Bankhaus Metzler downgraded the shares to sell from buy.
Linde rose 2.8 percent to 146.75 euros, the largest gain since Sept. 6. Operating profit climbed 13 percent to 953 million euros ($1.3 billion) in the first quarter as recently-acquired Lincare Holdings Inc. doubled sales of gases in North America, the German company said. That beat the 935 million-euro average prediction in a Bloomberg survey of analysts.
Celesio jumped 7.1 percent to 16.33 euros, the biggest advance since August 2011. Haniel, the Duisburg, Germany-based investment company, isn’t selling part of its 50 percent holding in the German drug wholesaler, spokesman Dietmar Borchert said today. Platow Brief had earlier reported a possible sale to CVS Caremark Corp.