European stocks tumbled the most since December, with exporters deepening a drop amid a rally in the euro.
Continental AG and Volkswagen AG slipped at least 4 percent, sending carmakers to the worst drop among industry groups. Germany’s DAX Index plunged 3.2 percent, the most in a year and among the biggest retreats in western-European markets. Antofagasta Plc and Outokumpu Oyj slid after reporting quarterly results, pushing miners lower.
The Stoxx Europe 600 Index fell 2.2 percent to 397.3 at the close of trading, trimming gains this year to 16 percent. The benchmark gauge extended losses as shares of exporters slid. The dollar declined against the euro after a report showed the U.S. economy barely expanded in the first quarter.
“European markets have gone up a lot during the first quarter on hopes that earnings are going to be good,” said Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva. “Now that we’re in the earnings season, it shouldn’t come as a surprise the market is a little bit more volatile. One thing that could prevent the market going higher is the strength of the euro recently. That may be detrimental to the performance of European exporters.”
Investors are also awaiting cues from the Fed on the timing of a rate increase, after data pointed to a weakening U.S. economy. The central bank will probably hold rates at a record low this month, economists forecast before a decision due after European markets close.
“There seems to be a period of wait-and-see regarding the Fed decision,” Mouton said. “For any substantial move higher we need good earnings and a strong U.S. economy.”
Miners fell the most since January. Antofagasta lost 2.2 percent after saying quarterly copper output slumped. Outokumpu plunged 12 percent as it forecast a loss in the second quarter.
Banco Bilbao Vizcaya Argentaria SA dropped 3.8 percent after the Spanish lender said net interest income declined from the previous quarter. Storebrand ASA slid 11 percent after reporting that profit declined more than estimated.
Hermes International SCA and Next Plc climbed at least 1.1 percent after both companies said quarterly sales increased.
InterContinental Hotels Group Plc advanced 1.4 percent after Starwood Hotels & Resorts Worldwide Inc. said it’s exploring strategic and financial alternatives to increase shareholder value.