European stocks fell as escalating violence in Iraq threatened oil supplies, and U.K. property companies declined.
Barratt Developments Plc and British Land Co. slid more than 4 percent as Chancellor of the Exchequer George Osborne pledged to increase the Bank of England’s power to restrict borrowing. Total SA rose as a gauge of oil-related stocks posted the best performance on the Stoxx Europe 600 Index. Geberit AG gained 1.7 percent after Goldman Sachs Group Inc. raised its rating on the maker of toilets and bathroom piping.
The Stoxx 600 retreated 0.2 percent to 347.07 at the close of trading, after earlier losing as much as 0.9 percent. The equity gauge fell 0.1 percent this week, snapping an eight-week rally. The measure closed little changed yesterday as U.S. retail sales grew slower than estimated and more Americans than forecast applied for unemployment benefits.
“The developments in Iraq will continue to be on investors’ radars as a spike in oil prices always holds the potential to spook market participants,” said Mark Andersen, co-head of global asset allocation at UBS AG’s wealth-management unit in Hong Kong.
Escalating violence in Iraq has stoked concern about further supply disruptions for OPEC’s second-biggest oil producer. Militants calling themselves the Islamic State in Iraq and the Levant are heading towards Baghdad after seizing several cities in the country. U.S. President Barack Obama said he won’t rule out using air strikes to help the Iraqi government.
In the U.S., a report showed that consumer confidence unexpectedly declined in June. The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 81.2 from 81.9 in May. The median projection in a Bloomberg survey of economists called for 83.
National benchmark indexes fell in 14 of the 18 markets in western Europe. Germany’s DAX slid 0.3 percent, France’s CAC 40 lost 0.2 percent, and the U.K.’s FTSE 100 dropped 1 percent.
Barratt slid 6.3 percent to 346.3 pence, Land Securities Group Plc fell 4.4 percent to 1,028 pence, and British Land retreated 4.3 percent to 686 pence. Under Osborne’s plans, the BOE’s Financial Policy Committee could cap the size of mortgages as a multiple of income or as a proportion of the value of the property. BOE Governor Mark Carney said rising U.K. mortgage debt may threaten Britain’s recovery as he signaled interest rates may start to rise sooner than markets expect.
A gauge of oil-related companies posted the best performance of the 19 industry groups on the Stoxx 600 as oil prices increased. Total, France’s largest oil company, rose 0.9 percent to 52.86 euros, and Ophir Energy Plc climbed 1.8 percent to 240.1 pence.
CGG SA surged 11 percent to 10.89 euros, the most in more than a year, amid speculation that Baker Hughes Inc. may bid for the world’s largest seismic surveyor of oilfields, according to Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England. CGG declined to comment.
Geberit gained 1.7 percent to 309.3 Swiss francs after Goldman Sachs raised its rating on the company to buy from sell, citing the likelihood of further market-share gains in Europe and emerging markets.