European Stocks Fall Amid Ukraine Violence, German DataJonathan Morgan
European stocks declined, erasing their gains for the year, after a report that Russian troops entered towns in eastern Ukraine, and as German confidence data missed economists’ forecasts.
SABMiller Plc lost 2.3 percent after saying it is considering options for the sale of its $1.04 billion stake in Tsogo Sun Holdings Ltd. Rio Tinto Group fell 3.1 percent after reporting first-quarter iron-ore output that missed forecasts. L’Oreal SA gained 1.1 percent after posting higher first-quarter European revenue.
The Stoxx Europe 600 Index fell 1 percent to 326.58 at the close of trading. The gauge rebounded yesterday amid better-than-estimated U.S. retail sales data and earnings from Citigroup Inc., after last week erasing most of the year’s gains as investors sold technology shares on valuation concerns. The equity benchmark has declined 0.5 percent so far this year.
“You have this huge uncertainty from the geopolitical front, which is pulling the market in a negative direction,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said in a phone interview. “There is a lack of conviction among investors. Sentiment is still tilted to the negative direction after the escalation in Ukraine at the weekend.”
The number of shares changing hands in Stoxx 600-listed companies was 10 percent greater than the 30-day average, according to data compiled by Bloomberg.
Troops from Russia’s 45th Airborne Regiment were in the eastern towns of Slovyansk and Kramatorsk, Ukraine’s first deputy Prime Minister Vitali Yarema said in televised comments on Channel 5. Ukrainian units backed by armored personnel carriers blocked all approaches to Slovyansk, Russia’s state-run RIA Novosti news service reported earlier, citing an unidentified pro-Russian activist.
Four militants were killed and two wounded when Ukrainian troops stormed an airport in Kramatorsk, taking it under control, RIA Novosti also said.
Envoys from Ukraine, Russia, the U.S. and European Union are scheduled to hold talks in Geneva on April 17 in an attempt to resolve the crisis.
In Germany, a gauge of investor confidence fell for a fourth month in April. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 43.2 from 46.6 in March. Economists had forecast a decline to 45.
“There is little doubt that the ZEW data will have had a depressing impact on sentiment because Germany is the engine room of growth in the euro zone, Jeremy Batstone-Carr, head of research at Charles Stanley & Co., said in a phone interview.
In the U.S., the Federal Reserve Bank of New York’s so-called Empire State manufacturing index declined to 1.29 this month from 5.61 in March. Economists surveyed by Bloomberg had forecast an increase to 8.
National benchmark indexes retreated in all of the western-European markets except Norway. The U.K.’s FTSE 100 slipped 0.6 percent, Germany’s DAX lost 1.8 percent, while France’s CAC 40 declined 0.9 percent.
Greece’s benchmark ASE Index tumbled 1.7 percent, for its ninth day of declines and longest losing streak since August 2011. The equity gauge rose 28 percent in 2013.
‘‘I think this is a case of people taking chips off the table as they’ve made so much money on Greece,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, said in a phone interview. “Greece is a small market, so if some investors leave it does not take too much for a cascading effect to the downside.”
SABMiller lost 2.3 percent to 3,052.5 pence. The world’s second-biggest brewer said its 39.6 percent holding in hotel and casino operator Tsogo Sun is not a core part of its operations.
Rio Tinto fell 3.1 percent to 3,302.5 pence. The world’s second-largest mining company said first-quarter iron ore production rose 8 percent to 52.3 million metric tons from 48.3 million tons a year earlier. That missed the 54.7 million-ton median estimate of analysts surveyed by Bloomberg.
A gauge of mining stocks slipped 2.4 percent, for the worst performance of the 19 industry groups in the Stoxx 600. Voestalpine AG tumbled 5 percent to 30.46 euros. ArcelorMittal lost 3.5 percent to 11.57 euros.
Banca Monte dei Paschi di Siena SpA plunged 10 percent to 22.5 euro cents, for its biggest drop since March 2012. Italy’s third-largest bank said it may increase the size of a planned share sale to reimburse part of a 4.1 billion-euro ($5.7 billion) government bailout.
L’Oreal advanced 1.1 percent to 122 euros. The world’s largest cosmetics maker said first-quarter revenue gained 2.8 percent in western Europe, excluding currency shifts and acquisitions, while southern European sales grew for the first time in six years.
Sodexo climbed 3.3 percent to 77.36 euros. Deutsche Bank AG raised its recommendation on the world’s second-largest catering company to buy from hold, citing expected strong earnings growth, increased operational efficiencies and the potential for cash returns.