European Stocks Drop Amid Greek Crisis With Automakers Falling

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European stocks declined for the third time in four days, as investors awaited a Greek referendum on creditors’ proposals this weekend.

The Stoxx Europe 600 Index lost 0.4 percent to 385.46 at the close in London, after rising as much as 0.3 percent in the morning. The gauge was little changed most of the day, and began falling as the euro strengthened against the dollar following a U.S. jobs report. Automakers were among the biggest decliners, while energy companies rose the most among 19 industry groups as oil advanced.

The benchmark gauge of Europe’s stocks has fallen 2.9 percent in the past four days, heading for its biggest weekly drop since May. Negotiations over Greece’s bailout broke down last weekend, when Prime Minister Alexis Tsipras announced the surprise July 5 referendum on creditors’ aid terms.

“People will just wait and see what happens after the referendum,” said Benedict Goette, founder of asset-management firm Compass Capital AG in Zurich. “The dynamics are still difficult for the market. There’s another turn every other day, a new rumor, a new leaked document.”

A measure of expected stock volatility was near a three-year high reached this week. A survey showed more Greeks are going against the government’s call to vote against creditors’ demands. The nation is now living with capital controls and has shut banks and its stock market after its euro-area financial-aid package expired and it missed a payment to the International Monetary Fund. Further bailout negotiations would have to wait until after the referendum.

U.S. Jobs

European equities first remained little changed after the U.S. payrolls report showed employers added 223,000 jobs and the unemployment rate fell to a seven-year low of 5.3 percent. Then, as the dollar weakened against the euro, the Stoxx 600 drifted lower.

The volume of Stoxx 600 shares changing hands was 18 percent below the 30-day average.

Benchmark equity gauges of Italy and France were among the biggest decliners in western-European markets. Germany’s DAX Index fell 0.7 percent, with K+S AG leading the drops.

After jumping 21 percent this year to a record in April, the Stoxx 600 began its descent amid a rebound of the euro, a bond rout and, finally, intensifying Greek talks. It slumped 4.6 percent in June, the most in two years. The DAX, among the biggest gainers at the start of the year, became the worst-performing developed market in the second quarter.

K+S, Electrolux

K+S lost 2 percent after the German potash supplier rejected a takeover offer from Potash Corp. of Saskatchewan Inc., saying the bid is too low.

Electrolux AB slumped 11 percent after the U.S. government sued to block its takeover of General Electric Co.’s appliance business. Lawyers for Electrolux said there is no justification for the lawsuit.

RWE AG, the utility whose coal-fired plants make it Europe’s largest carbon emitter, climbed 5 percent after Germany’s governing coalition agreed not to introduce a coal levy that had been discussed for months. BP Plc advanced 4.4 percent after reaching an agreement with states and the U.S. in the 2010 Gulf of Mexico oil spill case.

Syngenta AG climbed 3.1 percent as Monsanto Co.’s chief executive officer will be in Europe to meet with investors of the Swiss pesticide producer as he pursues its takeover. Dixons Carphone Plc added 1.2 percent after saying its Connected World Services unit has entered into an agreement with Sprint Corp. to open and manage Sprint-branded stores in the U.S.

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