Europe Stocks Fall Most in Two Weeks as Exporters Slide on China

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China Yuan Devaluation Cast Shadow Over European Stocks

Carmakers, miners and luxury-goods shares led a drop in European stocks after China devalued its currency by the most in two decades.

BMW AG and Daimler AG slid 4.3 percent or more, while LVMH Moet Hennessy Louis Vuitton SE and Swatch Group AG slipped at least 5.1 percent amid concern the yuan’s drop will hurt sales from China. Pernod Ricard SA and Remy Cointreau SA led losses in food-and-beverage shares. BHP Billiton Ltd. and Rio Tinto Group, the world’s biggest miners, fell more than 3 percent.

The Stoxx Europe 600 Index slid 1.6 percent to 393.61 at the close of trading, taking its decline since an Aug. 5 peak to 2.6 percent. China’s central bank cut its daily reference rate for the yuan, triggering the currency’s biggest one-day drop since 1994.

“It’s logical that Europe’s main exporters, like German automakers and luxury, move down significantly because it will be more difficult for these companies to sell in China,” said Francois Savary, Geneva-based chief investment officer at Reyl & Cie., which oversees about $11 billion. “Equity investors now need to factor in the currency move into their models.”

All Stoxx 600 industry groups fell. Germany’s DAX Index slid 2.7 percent for the worst performance among western-European markets. Greece’s ASE Index rose the most, up 2.1 percent.

The Mediterranean country and its creditors agreed on terms for its third bailout, paving the way for national parliaments to vote on the deal before a payment deadline next week. The ASE has gained 9.6 percent since an almost three-year low on Aug. 5.

Among shares moving on corporate news, Delta Lloyd NV tumbled 20 percent after reporting a drop in solvency ratio, a measure of the insurer’s ability to absorb losses. GAM Holding AG slipped 5.2 percent after the Swiss asset manager’s first-half profit declined. Konecranes Oyj surged 16 percent after Terex Corp. agreed to merge with the Finnish construction-equipment company.

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