European Stocks Are Little Changed as Erste Group FallsJonathan Morgan
European stocks were little changed, with equities posting their biggest monthly gain since July, as Ukraine accused Russia of stoking tension on its territory and data showed U.S. fourth-quarter economic growth slowed more than estimated.
Erste Group Bank AG tumbled the most since May 2009 after it projected a slow start to the year. Pearson Plc plunged to a three-year low after reporting a drop in full-year earnings. Serco Group Plc posted the biggest gain since 2001 after naming a new chief executive officer. Old Mutual Plc rose 5.8 percent after making an acquisition in the U.K.
The Stoxx Europe 600 Index gained 0.2 percent to 338.02. The benchmark gauge rallied 4.8 percent in February as Federal Reserve Chair Janet Yellen pledged to follow her predecessor Ben S. Bernanke’s policy on economic stimulus. She told Congress any reduction in bond buying will be made in measured steps, based on economic data. The Fed has cut the size of the monthly purchases to $65 billion from $85 billion.
“Investors are very concerned about the potential for Ukraine to prove disruptive,” Jeremy Batstone-Carr, head of research at Charles Stanley & Co. in London, said on the phone. “After a pretty good week, investors are just happy to sit on the sidelines and trading is by and large fairly subdued.”
Lawmakers in Kiev approved Turchynov’s call for a session by the United Nations Security Council even as armed troops occupied Crimea’s main airport in Simferopol. The Russian involvement has fueled speculation of a partition of Ukraine between Russian-speaking and Ukrainian-speaking regions. Prime Minister Arseniy Yatsenyuk warned parliament of the growing threat of an economic collapse.
Crimea is the latest flash point in a violent conflict since November that led to the departure of Viktor Yanukovych as Ukraine’s president. At the core of the unrest is Ukraine’s future itself. Yanukovych chose ties with Russia, abandoning a closer association with the European Union that his detractors, who now run the interim government, favor.
The number of shares changing hands in Stoxx 600-listed companies was 24 percent greater than the 30-day average, according to data compiled by Bloomberg based on volumes at this time of the day. MSCI Inc. will add Asos Plc and Royal Mail Plc to the MSCI World Index after the close of trading today.
The U.S. economy expanded at a slower pace in the fourth quarter than previously estimated. Gross domestic product grew at a 2.4 percent annualized rate from October through December, compared with the 3.2 percent gain estimated last month, revised figures from the Commerce Department showed. The median forecast in a Bloomberg survey called for a 2.5 percent increase.
Household purchases rose at a 2.6 percent pace, down from an originally reported 3.3 percent and slower than the 2.9 percent median forecast of economists surveyed by Bloomberg.
A report from the National Association of Realtors at 10 a.m. New York time may show that contracts to buy previously owned homes rose in January for the first time in eight months. A gauge of pending house sales increased 1.8 percent last month, after dropping in December by the most since May 2010, economists in a Bloomberg survey predicted.
The Thomson Reuters/University of Michigan survey of consumer Sentiment will stay at 81.2 in February, in line with a preliminary forecast, according to another survey.
National benchmark indexes gained in 13 of the 18 western-European markets. The U.K.’s FTSE 100 slipped less than 0.1 percent, while France’s CAC 40 added 0.3 percent. Germany’s DAX rose 1.1 percent.
Erste Group Bank dropped 10 percent to 25.71 euros. Austria’s biggest bank make provisions for bad loans and said it expects operating profit to miss estimates this year.
Pearson fell 5.9 percent to 1,013 pence, its lowest price since February 2011. Adjusted operating profit fell 21 percent to 736 million pounds ($1.23 billion) in 2013. Sales rose 2.3 percent to 5.18 billion pounds, missing the 5.8 billion-pound estimate by analysts in a Bloomberg survey.
Bankia SA, the lender whose losses forced Spain to take a European bailout, retreated 3.7 percent to 1.52 euros. Spain sold 7.5 percent of Bankia to start recovering 22.4 billion euros ($30.7 billion) provided to recapitalize the bank.
Serco climbed 12 percent to 460.5 pence. The outsourced-services provider appointed Aggreko Plc’s Rupert Soames as its CEO with effect from June 1. Aggreko lost 4.3 percent to 1,560 pence.
Old Mutual advanced 5.9 percent to 197.1 pence. Africa’s biggest insurer acquired Intrinsic Financial Services Ltd. for an undisclosed sum. Intrinsic has 3,000 financial advisers and brings a broad distribution network, the company said.
Andritz AG added 6 percent to 45.54 euros. The world’s second-biggest maker of hydro-power turbines reported a loss for the fourth quarter of 12.2 million euros, narrower than the 19.8 million-euro loss projected by analysts.