Europe Stocks Trim Weekly Gain, Unable to Shake Off Fed Concern

Here's How the Bull Market Continues Post-China
  • Telcos tumble after TeliaSonera, Telenor scrap Danish merger
  • Stoxx 600's weekly advance still the best since July

Concern persisted over an impending Federal Reserve rate decision, sending European stocks lower for a second day.

Declines in telecommunications shares contributed to losses after opposition from the European Union led Telenor ASA and TeliaSonera AB to scrap a merger of their Danish businesses. Rival TDS A/S slid 7.7 percent as the news ended its prospects of facing less competition. Telecom Italia SpA, a target of takeover speculation, slipped 3.1 percent.

The Stoxx Europe 600 Index dropped 1 percent at the close of trading, paring its weekly advance to 0.7 percent. After rising for three straight days, European shares slid yesterday as strong U.S. labor data stoked concern about a rate increase. A report today showed American consumer sentiment fell to a one-year low.

“A lot of people are sitting on the sidelines and taking some money off the table ahead of next week’s FOMC meeting,” said Markus Huber, a London-based senior sales trader at Peregrine & Black Ltd.. “Even though the chances of a rate hike are slim, people just want to be sure, just in case there are some comments from Yellen. We’re still in a consolidation phase where it hasn’t been decided whether the next major move is going to be up or down.”

Traders’ bets for a September increase have held steady at 28 percent this week. Fed Chair Janet Yellen holds a press conference after the decision.

Among other shares active on corporate news, Actelion Ltd. slid 5.4 percent after confirming it’s in preliminary talks with ZS Pharma Inc.

Finmeccanica SpA rallied 5.4 percent after a person familiar with the matter said partner Eurofighter GmbH is close to sealing a multi-billion euro order to supply warplanes to Kuwait. Regus Plc climbed 2.6 percent after a report that its founder recently rejected an approach from a private-equity firm.

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