European stocks fell the most since June, extending the Stoxx Europe 600 Index’s weekly drop, as investors assessed a tumble in emerging-market currencies amid concern Federal Reserve tapering is hurting growth.
Banco Bilbao Vizcaya Argentaria SA dropped 5.1 percent on investor concern that its exposure to Turkey and Argentina will hurt earnings. Novartis AG lost 3 percent after failing to win backing from a European advisory panel for its Serelaxin treatment for acute heart failure. Aberdeen Asset Management Plc slumped 5.7 percent as Morgan Stanley recommended selling the stock. Celesio AG gained 3.7 percent as McKesson Corp. agreed to buy majority-owner Franz Haniel & Cie.’s holding in the company.
The Stoxx 600 slid 2.4 percent to 324.75 at the close of trading, for a weekly loss of 3.3 percent. Emerging-market stocks extended their weekly drop today as currencies from commodity-exporting countries that depend on Chinese demand sank the most in five years.
“We’ve had the worst start for equities in some years and after one of the strongest years people are looking for excuses to sell,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “Positive macro surprises are looking toppish, underlined by China and U.S. yesterday. Monetary policy is losing its punch as a driver for risk sentiment.”
European stocks declined 1 percent yesterday, the biggest drop since Dec. 3, as a report showed manufacturing in China probably contracted this month. In the U.S., applications for unemployment benefits rose in the latest week while purchases of previously-owned homes climbed less in December than projected.
“After yesterday’s data out of China, which affected sentiment across the board, it’s a question of not rushing into anything,” said Gillian Hollenstein, chief investment officer at Labha Investment Advisors SA in Zurich, which oversees 100 million Swiss francs ($111 million).
The MSCI Emerging Markets Index has lost about 10 percent since the Fed signaled in May that it could start scaling back bond purchases that boosted demand for higher-yielding assets. A Bloomberg gauge tracking 20 emerging-market currencies slid to the lowest level since 2009 today.
National benchmark indexes fell in all 18 western European markets. The U.K.’s FTSE 100 slipped 1.6 percent, Germany’s DAX lost 2.5 percent and France’s CAC 40 retreated 2.8 percent.
The volume of shares changing hands in Stoxx 600 companies was 46 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
In Germany, the yield on 10-year government bonds fell to the lowest level since August as concern growth in emerging markets is slowing boosted demand for the safest assets.
BBVA, which controls Turkiye Garanti Bankasi AS, Turkey’s largest lender by market value, and a bank in Argentina, declined 5.1 percent to 8.85 euros. Banco Santander SA, which earns about a quarter of its profit from Brazil, fell 3.5 percent to 6.34 euros.
Novartis dropped 3 percent to 71.50 Swiss francs. The drugmaker will seek another review of Serelaxin after the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended against its approval for treating acute heart failure.
The drug had the potential to earn $456 million a year by 2017, with peak annual sales of $1 billion, according to analysts at Berenberg Bank.
Aberdeen Asset Management slumped 5.7 percent to 397.3 pence as Morgan Stanley cut its rating on Scotland’s largest money manager to underweight from equal weight, meaning investors should sell the shares. The brokerage cited challenges in emerging markets, foreign exchange headwinds and the increased risk of sustained fund outflows for the downgrade.
Syngenta AG retreated 4.7 percent to 334.70 francs as the National Grain & Feed Association and North American Export Grain Association asked the maker of crop chemicals to halt sales of two types of genetically modified corn seeds in the U.S. that have not been approved in China.
Celesio advanced 3.7 percent to 24.91 euros. McKesson, the largest U.S. drug distributor, will acquire Celesio just 10 days after a tender offer at the same price of 23.50 euros a share failed to reach the 75 percent threshold for the deal to go through. McKesson yesterday said it bought Celesio convertible bonds from hedge fund Elliott Management Corp., giving it more than 75 percent ownership of Celesio’s shares.