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European Stocks Decline From 2008 High; Commerzbank Sinks

European stocks declined from the highest level in almost five years as bank and airline shares retreated, overshadowing better-than-forecast retail sales data in the U.S.

Commerzbank AG sank the most in two months after Handelsblatt reported the lender will sell new shares this week. Standard Chartered Plc dropped to a four-month low as Carson Block, the short seller who runs Muddy Waters LLC, said he’s betting against the bank’s debt. Air France-KLM Group fell 4 percent. Lonmin Plc rallied 2.6 percent after the platinum producer returned to profit in the fiscal first half.

The Stoxx Europe 600 Index slipped 0.2 percent to 304.46 at the close of trading, snapping four days of gains. The gauge advanced 1.3 percent last week as companies from BT Group Plc to Hochtief AG posted better-than-expected earnings and European Central Bank President Mario Draghi said policy makers are ready to cut interest rates if needed. The measure has climbed 8.9 percent in 2013.

“We still expect the U.S. economy to hit a soft patch in the second quarter, but today’s numbers -- together with the recent labor-market news -- confirms that the underlying recovery is robust,” Witold Bahrke, who helps oversee $55 billion as senior strategist at PFA Pension A/S in Copenhagen, said in an e-mail. ‘The risk is that the U.S. economy turns out to be too strong, which could put the sweet spot of decent growth and loose financial conditions at risk.’’

Retail Sales

Retail sales in the U.S. unexpectedly advanced 0.1 percent in April following a 0.5 percent drop in March, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg called for a 0.3 percent decline.

A report on May 15 may show that the euro region is suffering the longest recession since the single currency’s creation. Gross domestic product in the 17-nation economy fell 0.1 percent in the first three months of 2013, a sixth straight quarterly decline, according to the median of 39 economists’ forecasts in a Bloomberg News survey. That would exceed the 15-month long contraction in 2008-2009.

In China, industrial output in April rose 9.3 percent from a year earlier and retail sales gained 12.8 percent, the National Bureau of Statistics said today. The gain in industrial output compared with the 9.4 percent median estimate in a Bloomberg News survey of 38 analysts and an 8.9 percent increase in March.


National benchmark indexes fell in 11 of the 18 western European markets. France’s CAC 40 retreated 0.2 percent, the U.K.’s FTSE 100 rose 0.1 percent while Germany’s DAX was little changed. The volume of shares changing hands in Stoxx 600 companies was 16 percent lower than the 30-day average, according to data compiled by Bloomberg.

Commerzbank slid 4.7 percent to 9.94 euros, the biggest drop since March 14. Germany’s second-largest bank will sell new shares a part of a 2.5 billion-euro ($3.3 billion) capital increase, Handelsblatt said, citing unidentified people in the finance industry.

Standard Chartered, the U.K. lender that earns most of its profit in Asia, slipped 1.9 percent to 1,552.5 pence as Block said he’s betting against the lender’s debt because of “deteriorating” loan quality.

“We think the market misunderstands the amount of risk that’s presently in the book,” Block said at a conference in Las Vegas on May 10. A $1 billion loan to Samin Tan, chairman of Bumi Plc, the coal company at the center of a dispute between co-founders Nathaniel Rothschild and Indonesia’s Bakrie family, and loans to Far East Energy Corp. were “red flags,” he said.

Standard Chartered

Julie Gibson, a spokeswoman for Standard Chartered in New York, declined to comment on May 10. Doris Fan, a Hong Kong-based spokeswoman at the lender, also declined to comment.

Air France led airlines lower, falling 4 percent to 7.30 euros. International Consolidated Airlines Group SA lost 1.9 percent to 270.7 pence while Deutsche Lufthansa AG slid 2.1 percent to 15.75 euros.

France reported its second confirmed coronavirus-related infection yesterday and Saudi Arabia’s Ministry of Health said the pathogen has killed 15 people in the Middle Eastern country since September. The virus is related to the one that caused Severe Acute Respiratory Syndrome, or SARS, a decade ago.

Lonmin advanced 2.6 percent to 286 pence. The third-largest platinum producer returned to profit in its first half through March from a year earlier. The profit of 13.3 cents a share compared with a loss of 6.3 cents in the year-earlier period. The median estimate in a Bloomberg survey of five analysts was for a loss of 4 cents.

Vestas Wind Systems A/S surged 11 percent to 66.30 kroner, its highest price since February 2012. Credit Suisse Group AG raised the world’s biggest wind-turbine maker to neutral from underperform, citing benefits from cost cuts.

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