German and French stocks dragged European shares to their biggest decline in a month amid investor concern Greece won’t reach an agreement with creditors in time for a debt repayment.
The Stoxx Europe 600 Index tumbled 1.7 percent to 399.87 at the close of trading, trimming its monthly gain to 1 percent. Benchmark gauges of French and German stocks fell at least 2.3 percent as automakers led declines among industry groups. Greece’s ASE Index slid 1.4 percent.
“The declines today are broad based, which suggests it’s also some end-of-month rotations,” said Espen Furnes, who helps oversee $85 billion at Storebrand Asset Management in Oslo. “As long as Greece is in the news, it will be a concern, although the real economic implications for the rest of Europe are negligible.”
Greece is under pressure to make stronger commitments to overhaul its economy and strengthen public finances before any further funds are released. The Mediterranean nation hasn’t yet said how it will make almost 1.6 billion euros ($1.75 billion) in International Monetary Fund payments scheduled for next month, with the first transfer due on June 5.
In the U.S., Commerce Department data showed the world’s largest economy contracted in the first quarter. Gross domestic product shrank at a 0.7 percent annualized rate, revised from a previously reported 0.2 percent gain, as a harsh winter, the strong dollar and delays at ports took their toll. Economists had forecast a 0.9 percent decline. A separate report showed consumer confidence fell to a six-month low in May.
“Obviously, the numbers out of the US were not good,” said Furnes “The market’s a bit more vulnerable now as volatility is increasing.”
The Stoxx 600 fell for a fifth time in six days, for a 1.9 percent weekly decline. The index is down 3.4 percent since a record last month, having swung between weekly gains and losses since mid-April.
Daimler AG, Volkswagen AG and BMW AG slid at least 2.3 percent, dragging a gauge of carmakers down for a second day. ArcelorMittal SA and Rio Tinto Group contributed the most to a decline in commodity producers.
Syngenta AG climbed 0.5 percent, paring gains of as much as 2.7 percent. The agrochemical maker that rejected an unsolicited $45 billion takeover offer from Monsanto Co. is preparing for a possible higher bid from its U.S. rival, according to people with knowledge of the situation.
Swiss stocks also fell after data showed first-quarter gross domestic product shrank the most in six years as the strong franc hurt exports. The SMI Index retreated 1.7 percent, with Richemont and Givaudan SA posting the biggest declines.
(A previous version of this story was corrected to show that U.S. GDP contracted less than estimated.)