Europe Stocks Decline From 3-Week High Amid Thin Trading Volume

European Stocks Extend Worst Dec. Drop Since 2002
  • Stoxx 600 is heading for its worst December since 2002
  • Most markets are either closed or trade half-day tomorrow

European stocks fell on the last full trading day of the year as a slide in oil prices weighed on investor sentiment.

The Stoxx Europe 600 Index lost 0.5 percent at the close of trading, after yesterday’s 1.4 percent gain. The volume of shares changing hands was 40 percent lower than the 30-day average. Markets will shut on Friday for New Year. Some including Germany, Switzerland and Italy, will also close tomorrow for New Year’s Eve, while others will have shorter trading hours.

European equities are heading for their worst December since 2002, down 4.6 percent. While they recouped some losses in the past two weeks, that hasn’t been enough to overcome a slide earlier this month amid disappointing European Central Bank stimulus measures and as a rout in commodity and crude prices intensified. Still, the Stoxx 600 is heading for its fourth straight annual advance.

“With no stream of information and very thin volumes, the markets seem to be following the oil price up and down, which is disheartening to see,” said Ben Kumar, who helps oversee about $14 billion as an investment manager at Seven Investment Management in London. “There was no real Santa rally. We remain optimistic about the fundamentals of the world, we just wish everyone else would get on board.”

All 19 Stoxx 600 groups fell, with energy producers the worst performers. Seadrill Ltd. and Tullow Oil Plc fell at least 5.5 percent, leading losses among energy companies.

Germany’s DAX Index declined 1.1 percent, extending its biggest monthly drop in three on its final day of trading this year. It has still surged 9.6 percent in 2015, outperforming the Stoxx 600 and the MSCI All Country World Index. Strategists see more gains for the benchmark in 2016.

Among stocks active on corporate news, Julius Baer Group Ltd. climbed 4 percent after the Swiss wealth manager said it expects to pay about $547 million to settle a U.S. tax investigation.

Steelmakers ArcelorMittal and Voestalpine AG advanced at least 1 percent after a report yesterday showed a decline in foreign steel coming into the U.S., allaying worries about cheap Chinese shipments.

Fingerprint Cards AB, Europe’s best-performing stock this year, climbed 13 percent. The Swedish maker of biometric technology will be included in the OMX Stockholm 30 Index next year.

The Stoxx 600 is heading for an annual advance of 7.4 percent. It lost a big part of this year’s gains amid concern over global growth, just as the Federal Reserve raised its interest rates for the first time in almost a decade. After surging as much as 21 percent to a record in April amid the ECB’s quantitative easing, the Stoxx 600 slid 12 percent through Monday.

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