European stocks retreated from a record, snapping a five-day advance, as Nokia Oyj and banks declined.
The Stoxx Europe 600 Index fell 0.5 percent to 411.7 at the close of trading, paring earlier losses of as much as 0.8 percent. Nokia slid 3.6 percent after confirming talks to buy Alcatel-Lucent SA, which jumped 16 percent. Banco Santander SA and Intesa Sanpaolo SpA dragged bank stocks to the biggest loss on the Stoxx 600. Rio Tinto Group and BHP Billiton Ltd. led a rebound in miners, with gains of at least 2.8 percent.
“Obviously the air is getting thinner and valuations are elevated,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “After such a good run, it’s getting too risky for investors to just jump into the market. We’ll focus on the upcoming earnings season and see what outlooks companies give us for more clues.”
European stocks extended a record on Monday, with Spanish equities jumping to their highest levels since January 2010. The Stoxx 600 has rallied 20 percent this year amid better-than-expected data including last week’s German industrial production report, pushing valuations to the highest in at least a decade.
Kuehne & Nagel International AG retreated 2 percent. The world’s biggest sea-freight forwarder said first-quarter earnings stagnated because of the stronger Swiss franc, missing analyst forecasts for growth.
Bayerische Motoren Werke AG and Daimler AG contributed the most to a decline in a gauge of auto-related stocks.
A measure of energy stocks was one of just three of the 19 industry groups on the Stoxx 600 to advance, as oil rose for a fourth day amid speculation U.S. production growth is slowing. Tullow Oil Plc jumped 8.6 percent after Citigroup Inc. recommended buying the shares.