European Stocks Decline From Highest Level in Six YearsSofia Horta e Costa
European stocks fell from a six-year high as declines in banks including Credit Suisse Group AG outweighed better-than-forecast data on U.S. home purchases.
Credit Suisse retreated 2.5 percent as a person familiar with the matter said U.S. regulators are investigating its accounting practices. Jeronimo Martins SGPS SA dropped 6.5 percent after reporting 2013 net income that missed predictions. Anheuser-Busch InBev NV rose 2.8 percent after the brewer posted earnings growth that exceeded estimates and predicted improvements in its largest markets.
The Stoxx Europe 600 Index retreated 0.2 percent to 337.7 at the close of trading, paring earlier losses of as much as 0.6 percent. About two stocks fell for each that rose on the benchmark measure. The equity gauge has advanced 4.7 percent this month, on course for the largest monthly gain since July. It declined 1.8 percent in January.
“There isn’t blind enthusiasm in the market like we had last year, and investors know there won’t be easy wins,” said Tobias Britsch, who helps oversee about $32 billion at Meriten Investment Management GmbH, in Dusseldorf, Germany. “Valuations are not cheap and there may be a little nervousness pushing investors to be more conservative now. Improvements in economic growth and an earnings rebound still need to be proven before many are willing to pile in more aggressively.”
The number of shares changing hands in Stoxx 600-listed companies was 13 percent lower than the 30-day average, according to data compiled by Bloomberg.
The Stoxx 600 traded at 14.6 times its members’ projected earnings, up from 13.7 times at the beginning of 2014, according to data compiled by Bloomberg.
In the U.S., purchases of new homes unexpectedly climbed in January to the highest level in more than five years, figures from the Commerce Department showed today in Washington. Sales increased 9.6 percent to a 468,000 annualized pace last month. Economists had forecast a decline to 400,000.
National benchmark indexes fell in 12 of the 18 western-European markets today. France’s CAC 40 lost 0.4 percent, Germany’s DAX lost 0.4 percent and the U.K.’s FTSE 100 dropped 0.5 percent.
Greece’s ASE Index rallied 3.3 percent to its highest level since July 2011. The country’s borrowing costs dropped as investors speculated that the Mediterranean nation will reach an agreement with international creditors to ensure its banks’ financing needs are manageable.
Credit Suisse slid 2.5 percent to 27.50 Swiss francs. The Securities and Exchange Commission is looking into whether the lender improperly moved money in its private-banking unit to conceal a drop in asset growth, the person said.
Barclays Plc, the U.K.’s second-biggest lender by assets, declined 1.8 percent to 253.2 pence. A gauge of banking companies fell for a second day on the Stoxx 600.
Jeronimo Martins slipped 6.5 percent to 12.17 euros, its biggest drop since 2009. The Portuguese retailer that gets most of its sales from Poland said net income rose 6 percent to 382 million euros ($524 million) in 2013. That missed the 386.8 million-euro average analyst projection compiled by Bloomberg.
Tesco Plc fell 2.7 percent to 326 pence as Oriel Securities Ltd. cut its rating on the U.K.’s largest retailer to hold from add. The brokerage said that Tesco failed to announce sufficient changes at yesterday’s investor day to reverse declining same-store sales. Analysts at Deutsche Bank AG and Barclays said Tesco’s promise of permanently cheaper prices will hurt its profitability.
Lanxess AG retreated 2.7 percent to 53.37 euros. The chemicals maker predicted it would report a net loss of 159 million euros for 2013 when it publishes final figures on March 20. The company took a charge of 257 million euros in the fourth quarter of 2013 because it produced more goods than it could sell and raw material and energy costs were high, according to a statement.
RWE AG fell 4.2 percent to 29.07 euros. U.K. market regulator Ofgem said energy suppliers will have to comply with new rules from March 31, including having to publish prices at which companies will trade wholesale power as many as two years in advance. The German utility generated more than 18 percent of its revenue in the U.K. in 2012, according to data compiled by Bloomberg.
EON SE, which also has a U.K. operation, declined 2.9 percent to 13.73 euros. A gauge of utility stocks posted the worst performance on the Stoxx 600.
AB InBev added 2.8 percent to 76.34 euros. Earnings before interest, taxes, amortization and depreciation, excluding some items, totaled $5.2 billion in the fourth quarter, the brewer of Budweiser beer said today in a statement. That beat the $5 billion median estimate of 11 analysts surveyed by Bloomberg. So-called organic growth of 13 percent exceeded projections for 10 percent.
Swiss Life Holding AG climbed 6 percent to 214.70 francs. The country’s largest life insurer raised its payout by 22 percent to 5.50 francs a share. Bloomberg calculations had projected no dividend change. Net income of 781 million francs ($878 million) for 2013 also exceeded analysts’ estimates as premium income rose and costs declined.
Ferrovial SA added 3.2 percent to 15.47 euros, its highest price since its October 2004 initial public offering, after reporting 2013 net income rose to 727.2 million euros from 691.7 million a year earlier. That exceeded the 586.9 million euros projected by analysts.