European Stocks Decline on Ukraine, Chinese Manufacturing
European stocks fell, following a third week of gains for the region’s equities, as violence intensified in eastern Ukraine, while a report showed Chinese manufacturing contracted for a fourth month.
Credit Suisse Group AG dropped 2.3 percent after JPMorgan Chase & Co. forecast its own trading revenue will slide this quarter. Wincor Nixdorf AG lost 5.1 percent after the maker of self-checkout tills in supermarkets posted worse-than-expected earnings. Wacker Chemie AG dropped 3 percent after the chemical maker also reported earnings that missed estimates.
The Stoxx Europe 600 Index slid 0.3 percent to 336.89 at the close after earlier falling as much as 0.9 percent. The benchmark gained 1.3 percent last week, its largest rally in a month, amid renewed mergers-and-acquisitions activity. The U.K. market is closed for a public holiday today.
“The rising tension in Ukraine is adding to investors’ reduced risk appetite,” said Kai Fachinger, who oversees about $700 million as a money manager at RobecoSAM AG in Zurich. “The European markets are impacted by the negative reading from the Chinese PMI numbers that indicate a further deterioration of growth into the second quarter.”
European equities dropped with Euro Stoxx 50 Index futures in the 15 minutes through 9:35 a.m. on concern that the violence in Ukraine would worsen. Contracts on the measure of euro-area futures lost 26 points, or 0.8 percent, to 3,102 during the 15-minute period as the number of futures exchanging hands exceeded 70,000, according to data compiled by Bloomberg. That was five times greater than the average turnover for that time in the past 20 days, the data show.
The confrontation between Ukrainian forces and pro-Russian separatists intensified over the weekend. Rebels operating in the eastern town of Slovyansk killed four troops loyal to the acting government in Kiev and wounded 30 others, the Interior Ministry said on its website. The fighting has now spread to Odessa in western Ukraine.
The European Commission published its spring economic forecasts today. The European Union’s executive arm lowered its growth estimate for the overall gross domestic product of the 18 nations using the euro to 1.7 percent in 2015. It had predicted 1.8 percent as recently as February.
In China, HSBC Holdings Plc and Markit Economics said their purchasing managers’ index rose to 48.1 last month. Economists had predicted the measure would climb to 48.4 from 48 in March. Readings below 50 mean that activity contracted.
The volume of shares changing hands in Stoxx 600 companies was 64 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Credit Suisse retreated 2.3 percent to 27.40 Swiss francs. JPMorgan said in a statement that its trading revenue will probably drop 20 percent in the second quarter.
A gauge of European banks contributed the most to the Stoxx 600’s decline today. Societe Generale SA, France’s second-largest lender, retreated 1.1 percent to 44.44 euros, while Deutsche Bank AG slipped 1.1 percent to 31.27 euros.
Wincor Nixdorf dropped 5.1 percent to 46.20 euros. The maker of automated teller machines posted earnings before interest, taxes and amortization of 27 million euros ($37.5 million) in the second quarter of its financial year. That missed the average analyst estimate of 34.9 million euros in a Bloomberg survey.
Wacker Chemie fell 3 percent to 85.81 euros. Earnings before interest, taxes, depreciation and amortization amounted to 285 million euros in the first quarter, trailing the 291.1 million euros that analysts had projected.
Securitas AB (SECUB) declined 4 percent to 74.95 kronor. The world’s second-biggest guarding-services provider posted first-quarter profit of 414 million kronor ($63 million), falling short of the 437 million kronor that analysts had estimated.
SAP AG (SAP) lost 1.8 percent to 56.74 euros. Vishal Sikka stepped down as chief technology officer, citing personal reasons. Bill McDermott has made a series of changes to the senior management team at the world’s largest maker of enterprise software as he prepares to take over as the company’s sole chief executive officer later this month.
Nordex SE gained 4.1 percent to 12.20 euros after Deutsche Bank AG raised the German turbine maker to buy from hold.
Portugal’s Prime Minister, Pedro Passos Coelho, said yesterday that the country will exit its three-year bailout program without seeking a precautionary credit line from the EU. Portugal last month held its first bond auction since requesting the 78 billion-euro rescue from the EU and the International Monetary Fund in 2011. The program ends on May 17.
In the U.S., a report showed that the Institute for Supply Management’s non-manufacturing index rose to 55.2 in April from 53.1 in March. That beat the median forecast of 54 in a Bloomberg News survey of economists.
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