European Stocks Drop for Second Day Amid Ukraine Tensions
European stocks declined for a second day as investors weighed escalating tensions between America and Russia over the future of eastern Europe.
Suedzucker AG plunged the most since at least 1998 after saying revenue and profit in the year through February 2015 will miss analysts’ estimates. Sports Direct International Plc slid the most this year after founder Mike Ashley sold a 4 percent stake. Nokia (NOK1V) Oyj climbed the most since October after getting China’s approval for the sale of its handsets business to Microsoft Corp.
The Stoxx Europe 600 Index slipped 0.3 percent to 333.85 at the close of trading in London, after earlier declining as much as 1 percent. The benchmark measure lost 1.2 percent yesterday as technology shares retreated. The gauge has advanced 1.7 percent in 2014.
“There are increasing fears about the Ukraine situation,” Herbert Perus, who helps oversee $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said in a phone interview. “Today it is more or less stocks that are connected in some way to eastern Europe or to Russia that are suffering losses.”
Ukraine sent forces into its eastern regions after pro-Russian protesters seized government buildings in Donetsk, Luhansk and Kharkiv this week. The U.S. accused Russia of instigating the raids, amid increasing concern that Russian President Vladimir Putin plans to make Ukraine a loose federation. The U.S. has said there is evidence that some protesters may be paid provocateurs.
Suedzucker AG slumped 21 percent to 16.23 euros. The maker of sugar, starch and bakery additives projects full-year revenue of about 7 billion euros ($9.6 billion), below analysts’ estimates of 7.5 billion euros. The company, which is reviewing costs in the sugar business, projected operating profit of about 200 million euros, trailing estimates of 608 million euros.
Sports Direct slid 9.2 percent to 811 pence, for its biggest drop since Dec. 12. Ashley sold 24 million shares at 850 pence each, it said in a statement. Ashley sold the holding after acquiring an 11 percent stake in House of Fraser Ltd.
Resolution Ltd. (RSL), which will change its name to Friends Life Group Ltd. in July, declined 3.8 percent to 277 pence. Bank of America Corp.’s Merrill Lynch unit downgraded the insurance-buyout company to underperform, similar to sell, from neutral. Merrill Lynch said regulatory changes in the U.K. insurance business will hit Resolution hard.
AXA SA dropped 1.8 percent to 18.70 euros. ING Groep NV lost 3 percent to 10.17 euros. Prudential Plc retreated 1.5 percent to 1,298.5 pence.
The London Stock Exchange Group Plc, Europe’s oldest independent bourse, slid 2.2 percent to 1,891 pence. Russian companies should seriously consider delisting from foreign exchanges, said First Deputy Prime Minister Igor Shuvalov. Russian companies listed on the LSE include RGI International Ltd., Evraz Plc, Highland Gold Mining Ltd. and MirLand Development Corp.
Nokia rose 5 percent to 5.59 euros. China’s Ministry of Commerce said it has approved Nokia’s deal with Microsoft after the U.S. software company pledged it won’t ban Chinese phone makers from using its patents. With this clearance, Nokia said it expects the transaction to be completed this month.
To contact the reporter on this story: Jonathan Morgan in Frankfurt at firstname.lastname@example.org
To contact the editors responsible for this story: Cecile Vannucci at email@example.com Srinivasan Sivabalan