A slump in German shares pushed European stocks lower for the first time in four days amid a selloff in euro-area government bonds.
The Stoxx Europe 600 Index dropped 1.3 percent to 396.09 at the close of trading, having earlier lost as much as 2.1 percent. All 19 industry groups declined. Yields surged on 10-year notes in Germany, Italy and Spain, while the euro strengthened.
The Stoxx 600 has retreated 4.3 percent after a 21 percent surge this year through a record in April amid quantitative-easing measures by the European Central Bank.
“The weakness today is broad-based,” said Espen Furnes, who helps oversee $85 billion at Storebrand Asset Management in Oslo. “The bond market is showing more volatility and can possibly signal a less sanguine attitude towards QE. You can’t hide the fact that equity markets have had an excellent start to the year. In that context I find it reasonable that some investors wish to take some profits.”
High expectations for the ECB’s bond-buying program pushed global bond valuations to extreme levels, triggering a “large and vicious” selloff in European debt, Goldman Sachs Group Inc. wrote in a note.
All but two of 18 western-European markets fell. Germany’s DAX Index led declines, tumbling 1.7 percent. The U.K.’s FTSE 100 Index, France’s CAC 40 Index and Spain’s IBEX 35 Index slipped more than 1 percent.
Greece’s ASE Index climbed 1.4 percent as the European Central Bank’s Governing Council chose not to tighten emergency liquidity access to the country’s banks. It also raised the cap on funding by 1.1 billion euros ($1.2 billion) to 80 billion euros on Tuesday, according to people familiar with the matter.
Among shares active on corporate news, EasyJet Plc plunged 9.8 percent after saying flight cancellations in April stemming from French strikes would hurt pretax profit by about 25 million pounds ($39 million). Carlsberg A/S fell 4.7 percent after reporting a widening first-quarter loss in eastern Europe.
Clariant AG slid 4.3 percent after its chief executive officer quelled bid speculation, telling Basler Zeitung the Swiss cosmetics-maker has received no offers.
Altice SA jumped 9 percent after reporting an increase in first-quarter earnings. ThyssenKrupp AG climbed 2.8 percent after the German steelmaker raised its full-year profit forecast.
The Stoxx 600 rose Monday amid gains in retailers and miners. It climbed the most this year on Friday, buoyed by a surprise election win for the Conservatives and improving U.S. jobs data.