Aug. 28 (Bloomberg) -- German stocks declined, with the benchmark DAX Index falling to its lowest level in seven weeks, amid growing concern that the U.S. will take military action against Syria.
Volkswagen AG lost 2.3 percent as a gauge of carmakers was the worst performing group on the regional-benchmark Stoxx Europe 600 Index. Deutsche Lufthansa AG, Europe’s second-biggest airline, fell 3.2 percent, following its European peers lower.
The DAX slipped 1 percent to 8,157.9 at the close of trading in Frankfurt. The gauge has lost 4.4 percent since May 22 as the Federal Reserve said it may reduce bond purchases if the economy improves sustainably. The HDAX Index fell 1.1 percent today.
“Even before the Syrian geopolitical risk came to the fore, equities were on a weak footing due to the looming Fed’s September tapering,” Jamal Meliani, a strategist at Newedge in Paris, said in e-mailed comments. “In a worst case scenario of a U.S.-led intervention being protracted, the Fed would probably delay the start of tapering but this would be of little help to equities in a context of extreme risk aversion.”
The volume of shares changing hands in DAX-listed companies was 14 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
The U.S., France and Britain are moving closer to military action against Syria, laying out the justification, putting forces into place and rounding up allies in the region.
President Barack Obama plans to release an intelligence assessment this week and U.K. Prime Minister David Cameron said Britain will put forward a draft resolution at the United Nations today authorizing action to protect civilians.
“The poison gas in Syria, the potential intervention of U.S. soldiers and a further escalation in this powder-keg remain the key triggers also on the trading floor,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in an e-mail. “Markets are alienated by the insecurity and the unknown indirect consequences in a region which is affected by a lot of disturbances.”
Fewer Americans signed contracts in July to buy previously owned homes, figures from the National Association of Realtors showed today in Washington.
The index of pending home sales dropped 1.3 percent, the most this year, after a 0.4 percent decrease in June. Economists forecast no change in the gauge from the month before, according to a median estimate in a Bloomberg survey.
A measure of auto-related companies declined the most on the Stoxx 600 as China’s official Xinhua News Agency reported that the Asian nation plans to widen the scope of its consumption tax to include more luxury goods. China is also targeting goods that cause heavy pollution or use excessive levels of energy for consumption tax adjustments, Xinhua said on its official microblog today.
Volkswagen, Europe’s biggest automaker, lost 2.3 percent to 172.30 euros. Bayerische Motoren Werke AG, the world’s largest manufacturer of luxury vehicles, declined 1.7 percent to 71.75 euros. Daimler AG, the third-biggest luxury-vehicle maker, fell 2.1 percent to 51.79 euros. Continental AG, Europe’s second-largest auto-parts supplier, lost 4.1 percent to 112 euros.
Travel and leisure companies posted the third-largest decline on the Stoxx 600 as the price of oil advanced. Lufthansa fell 3.2 percent to 13.49 euros, its lowest price since Dec. 11.
RWE AG and EON AG, Germany’s largest utility companies, rose 2.9 percent to 21.34 euros, and 1.7 percent to 12.21 euros, respectively. A gauge of utility-related companies was the second-best performer on the Stoxx 600.
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