European Stocks Slide as German Confidence FallsJonathan Morgan
European stocks fell for a third straight day as German investor confidence declined more than forecast and the International Monetary Fund cut its global growth outlook.
Michael Page International Plc slumped the most in 11 months after the U.K. recruiter reported lower profit. LVMH Moet Hennessy Louis Vuitton SA retreated to a five-month low as sales of fashion and leather goods slowed. Danone rallied to the highest in five weeks as the food company posted first-quarter sales growth that beat analysts’ estimates.
The Stoxx Europe 600 Index sank 0.8 percent to 288.16 at the close of trading, extending the decline over the past three days to 2.3 percent. The benchmark gauge has still gained 3 percent this year as U.S. lawmakers agreed on a compromise budget and central banks maintained stimulus measures.
“The ZEW and other data shows that Germany is facing a slowdown,” Soeren Steinert, who helps manage about $24 billion as associate director for equities trading at Quoniam Asset Management GmbH in Frankfurt, wrote in an e-mail. “That will affect Europe for sure.”
National benchmark indexes declined in all 18 western European markets, except Iceland. The U.K.’s FTSE 100 Index slipped 0.6 percent, Germany’s DAX Index slid 0.4 percent and France’s CAC 40 lost 0.7 percent. The volume of shares changing hands in Stoxx 600 companies was 7.9 percent lower than the 30-day average, according to data compiled by Bloomberg.
In Germany, Europe’s biggest economy, the ZEW Center for European Economic Research’s index of investor and analyst expectations fell to 36.3 in April from 48.5 last month. Economists in a Bloomberg survey had predicted a reading of 41.
The IMF trimmed its 2013 growth forecasts for a fourth consecutive time, saying the global economy will expand 3.3 percent. The Washington-based fund had previously estimated 3.5 percent expansion this year.
“The market is pretty pessimistic at the moment,” Catherine Raw, a fund manager in London at BlackRock Inc., which oversees about $3.8 trillion globally, said in an interview today on Bloomberg Television with Francine Lacqua. “Its expectation is that growth in China is at that 7 to 8 percent level. Its expectation is that U.S. growth will come through, but even then it is still a bit nervous.”
Michael Page plunged 5 percent to 377.4 pence, the biggest drop since May 4, 2012. The recruitment company reported a 6.7 percent drop in first-quarter gross profit and forecast the second quarter will be “challenging.”
LVMH retreated 3.8 percent to 126.25 euros, the lowest since Nov. 16. The maker of Louis Vuitton bags said fashion and leather goods revenue rose 3 percent in the three months through March, excluding currency swings and acquisitions, the weakest quarterly rate since the final period of 2009. Analysts had predicted 5 percent growth.
A gauge of utilities slid the most since July for the biggest decline among 19 industry groups in the Stoxx 600. The European Parliament rejected a proposed change to emission-trading rules that would allow the supply of carbon permits to be curbed temporarily.
EON SE and RWE AG, Germany’s largest utilities, tumbled 5 percent to 13.74 euros and 2.2 percent to 29.48 euros, respectively. Fortum Oyj, Finland’s biggest utility, plummeted 7.5 percent to 13.88 euros and Verbund AG, the largest in Austria, fell 7 percent to 16.18 euros.
Stockmann Oyj lost 3 percent to 11.30 euros, the lowest price in almost four years. The Finnish department-store owner said full-year profit will miss forecasts as a recession in the northernmost country using the euro hurt first-quarter revenue.
Danone rose 2.2 percent to 55.68 euros after the Paris-based maker of Evian bottled-water and Activia yogurt reported first-quarter sales growth that beat estimates as strong demand for baby food in emerging markets offset weak dairy sales in Europe. Comparable sales gained 5.6 percent, topping the 4 percent average of 14 analysts’ estimates compiled by Bloomberg.
Actelion Ltd. gained 3.7 percent to 54.30 francs after the Swiss drugmaker that gets almost all its sales from a treatment for a rare lung disease reported quarterly profit that beat estimates and said it may raise its full-year forecast.
Mining companies climbed, with the Stoxx 600 Basic Resources Index rebounding 0.3 percent after the biggest drop since November 2011. Gold advanced 2.4 percent to $1,380.03 an ounce in London trading, after plunging 9.1 percent yesterday. Silver and platinum also rose.
Lonmin Plc, the world’s third-largest platinum producer, surged 7.1 percent to 274.7 pence. Fresnillo Plc, the biggest primary silver producer, gained 7.5 percent to 1,161 pence.
Xstrata Plc increased 2 percent to 986 pence as China’s Ministry of Commerce approved Glencore International Plc’s $30 billion takeover of the Swiss mining company. Glencore rose 1.3 percent to 325.1 pence.