Germany's DAX Falls to Lowest This Year as Emission Woes Spread

European Stocks Fall to Lowest Level Since January
  • BMW slides after report X3 model exceeded pollution limits
  • Miners Retreat as Goldman Sachs forecasts slump in copper

The fallout from Volkswagen AG’s emissions-cheating scandal spurred a selloff in shares that dragged Germany’s DAX Index to its lowest level of the year.

BMW AG dropped 5.2 percent as Autobild reported that diesel emissions from an X3 model exceeded European Union limits by as much as 11 times in a real-world road test. That helped push a regional gauge of automakers to its lowest level since November. 

The DAX retreated 1.9 percent today, taking its losses since Volkswagen admitted the deception to 4.9 percent. The Stoxx Europe 600 Index fell 2.1 percent and closed at its lowest level since January. 

“I think we’re going to see the automakers weighing on the market much more in the coming weeks,” said Barthelemy Debray, a fund manager at Old Mutual Global Investors in London. “We’ve heard nothing from auto suppliers and from auto manufacturers, I think they are in crisis mode. I think this is just the beginning.”

Investors hoping to get the benefits of the European Central Bank’s stimulus program are instead facing a selloff. Concern over the state of the international economy is weighing on global markets, with Asian shares falling and the Standard & Poor’s 500 Index headed for the lowest close in three weeks. The Stoxx 600 has lost 14 percent since the ECB started its quantitative-easing program. President Mario Draghi yesterday said the central bank needs time to consider if risks to the economic outlook warrant a step-up in stimulus.

The volume of Stoxx 600 shares changing hands today was 20 percent higher than the 30-day average. A measure of European stock volatility jumped 7.7 percent to its highest level since Sept. 7.

Equities have oscillated since the Federal Reserve held rates on Sept. 17, citing concerns about inflation and the impact of a slowdown in China. Fed Chair Janet Yellen speaks today and investors will be looking for any clarification of the central bank’s thinking. Odds of a hike at its next meeting in October are at 18 percent, according to Fed funds futures, while the probability of an increase at the December gathering is about 39 percent.

Miners resumed their tumble, falling to their lowest level since 2009 after Goldman Sachs Group Inc. forecast a slump in copper prices. Glencore Plc sank 9.6 percent to a record low. Tullow Oil Plc lost 5.6 percent, leading energy shares lower, while Vinci SA fell 2.9 percent after Morgan Stanley cut its rating to the equivalent of a sell.

Schindler Holding AG dropped 6.8 percent after saying that Chinese authorities are questioning two local executives, including the managing director for China, as part of a probe that may be related to embezzlement and bribery.

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