European stocks declined, following their first weekly drop since January, on rising tensions over Ukraine’s Crimea region and after an unexpected slump in Chinese exports triggered a selloff in mining stocks.
Aurubis AG and Fresnillo Plc lost more than 3.4 percent each as commodity producers fell. Iliad SA surged to its highest price since its 2004 initial public offering after Bouygues SA said it is in talks to sell some of its mobile-phone assets to the operator of the Free brand. Rolls-Royce Holdings Plc rose 1.7 percent after Daimler AG said it will sell a 50 percent stake in an engine joint venture to the British company.
The Stoxx Europe 600 Index slipped 0.5 percent to 331.4 at the close of trading in London. The benchmark gauge slid 1.5 percent last week as company earnings disappointed and concern grew that the standoff between Russia and Ukraine would worsen.
“The problems in Ukraine are not going to go away quickly, so investors are concerned,” said Jacques Porta, who helps oversee $780 million at Ofi Gestion Privee in Paris. “There will be a resolution at some point, but in the meantime, we will probably see a lot more volatility in markets. The Chinese exports data was bad news, so European mining stocks are down.”
Russia is wresting control of Crimea, home to its Black Sea Fleet. The U.S. estimates the Kremlin now has 20,000 troops confronting a smaller Ukrainian force there. Crimeans will vote in a referendum on March 16 whether to join Russia or renegotiate the autonomous region’s status within Ukraine. Gunmen have blocked three attempts by a mission from the Organization for Security and Cooperation in Europe to enter Crimea, with warning shots being fired on March 8.
In China, overseas shipments unexpectedly dropped 18.1 percent in February from a year earlier, according to customs data on March 8. The median estimate of analysts surveyed by Bloomberg called for an increase of 7.5 percent.
National benchmark indexes dropped in 11 of the 18 western-European markets. Germany’s DAX lost 0.9 percent, and the U.K.’s FTSE 100 fell 0.4 percent. France’s CAC 40 climbed 0.1 percent.
Aurubis, a German copper producer, declined 4.1 percent to 37.17 euros and Fresnillo dropped 3.4 percent to 896 pence. A gauge of mining stocks in the Stoxx 600 lost 2.2 percent for the biggest decline among 19 industry groups.
Vodafone Group Plc fell 3.6 percent to 230.1 pence. Expansion said the phone company could offer as much as 7.5 billion euros for Grupo Corporativo Ono SA. The Spanish newspaper cited unnamed sources familiar with the matter.
The British company on March 5 raised its bid to about 7 billion euros in a meeting with key Ono shareholders Providence Equity Partners and Thomas H. Lee Partners, two people familiar with the matter said.
Aryzta AG declined 3.5 percent to 71.45 Swiss francs. The supplier of bakery products said its first-half margin on earnings before interest, taxes and amortization remained at 12.3 percent for its food unit. That missed Vontobel Holding AG’s estimate of 12.6 percent, according to a note.
Iliad jumped 11 percent, its biggest rally since June 2006, to 210 euros. Bouygues said it is in exclusive talks to sell part of its network and wireless spectrum to the Free operator for as much as 1.8 billion euros ($2.5 billion). Bouygues climbed 8.7 percent to 32.69 euros.
Bouygues, the construction and telecommunications company seeking to merge its mobile-phone assets with Vivendi SA’s SFR, said the negotiations will help address concerns of the French Competition Authority. Vivendi fell 0.1 percent to 20.30 euros.
Rolls-Royce climbed 1.7 percent to 1,043 pence. Daimler is selling its holding in Rolls-Royce Power Systems under a put option agreed with the maker of commercial-jet engines when the venture was established three years ago. The stake is valued at 1.9 billion pounds ($3.2 billion). Daimler fell 1.3 percent to 66.54 euros.
Hochtief AG rose 2.3 percent to 69.94 euros. Germany’s largest builder offered A$1.16 billion ($1.05 billion) to raise its stake in Leighton Holdings Ltd. to as much as 74 percent from 59 percent. Hochtief said the deal was a strategic investment in Australia’s largest builder and it may consider a full takeover. Leighton surged 11 percent to A$23.09.