European Stocks Slide for Fifth Day as Brexit, Fed Decision Loom

European Stocks Fall for Fifth Day on Brexit Concerns
  • ‘Leave’ campaign seen leading in latest referendum polls
  • VStoxx index caps biggest five-day gain since August

Stocks in Europe fell to an almost four-month low as speculation intensified that Britain will vote to leave the European Union and traders awaited central-bank meetings.

The Stoxx Europe 600 Index dropped 1.9 percent at the close of trading. The benchmark capped its worst five-day plunge since February as Britain’s largest-selling newspaper backed a so-called Brexit and five polls put the U.K.’s “Leave” campaign ahead of “Remain,” before the June 23 referendum. The pound fell, and Germany’s 10-year bund yield dropped below zero for the first time ever.

A measure of euro-area stock volatility jumped 12 percent, taking its five-day gain to 64 percent, as investors also prepared for policy reviews by the Federal Reserve and the Bank of Japan tomorrow. All 19 groups on the Stoxx 600 fell, with miners and energy shares sliding the most.

“Brexit is one out of a whole bag of unresolved points right now,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “There are also questions about the actions of the Bank of Japan, the Bank of England, the Fed, the European Central Bank’s bond buying, company earnings. For investors, the glass is half empty and not half full at the moment -- there is a lot of combined nervousness.”

After climbing 16 percent from a February low to an April 20 high, the Stoxx 600 has struggled to maintain momentum amid lackluster earnings, skepticism over the ECB’s stimulus program and worries over global growth.

Among shares active on corporate news, GAM Holding AG tumbled 18 percent after the Swiss asset manager said first-half profit will probably halve as performance fees dry up. Novo Nordisk A/S fell 5.6 percent after its diabetes drug showed a smaller benefit than analysts had expected in reducing the risk of heart attacks, strokes and deaths from cardiovascular diseases.

Premier Farnell Plc soared 50 percent after Switzerland’s Daetwyler Holding AG agreed to buy the electronic-component distributor for an enterprise value of 792 million pounds ($1.1 billion). FirstGroup Plc climbed 6 percent after reporting full-year earnings in line with estimates and saying it’s better protected against a potential Brexit than its rivals.

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