European Stocks Fall as Siemens Disappoints, Greek Banks SlideAlan Soughley and Inyoung Hwang
European stocks declined from a seven-year high, snapping their longest winning streak since April, as Siemens AG and Royal Philips NV posted disappointing earnings, and Greek stocks tumbled.
Siemens slid 3 percent, contributing the most to a drop in a gauge of industrial companies, after Europe’s largest engineering firm reported a decline in first-quarter profit. Philips lost 5.9 percent after saying it is behind on its 2016 financial targets. Greek banks dragged a gauge of lenders down.
The Stoxx Europe 600 Index slipped 1 percent to 368.7 at the close of trading, after earlier falling as much as 1.4 percent. The index on Monday capped eight days of gains amid optimism about European Central Bank stimulus, while Greek shares slid as opposition party Syriza won the election on Sunday. The Swiss Market Index rose 1.3 percent today, its third day of gains, as Swiss National Bank Vice President Jean-Pierre Danthine said it is willing to intervene in currency markets even after giving up its cap on the franc.
“With Siemens, it’s worrying in the sense that Germany’s an industrial power and a good part of their business is exports,” Jasper Lawler, a market analyst at CMC Markets Plc in London, said by telephone. “There’s going to be a lot of focus on the negotiations between Greece and the Troika. Whenever we hear parties involved making commentary, there’s going to be volatility. It’s adding to the distrust of how the euro zone functions.”
The ASE Index fell for a second day, erasing its Friday rally, as new Prime Minister Alexis Tsipras took office promising to end austerity. The gauge dropped 3.7 percent, with Eurobank Ergasias SA, National Bank of Greece SA, and Piraeus Bank SA plunging at least 12 percent to record lows.
Italy’s FTSE MIB Index slid 0.5 percent and Spain’s IBEX 35 Index lost 0.9 percent. France’s CAC 40 Index and Germany’s DAX Index retreated more than 1 percent.
Among stocks bucking the downward trend, EasyJet Plc rose 1.9 percent after posting an increase in first-quarter revenue.
IAG SA rose 2.2 percent. The owner of British Airways said it was granted access to the books of Aer Lingus Group Plc after raising its bid for a second time to a level that values the Irish carrier at about 1.36 billion euros ($1.55 billion).
(In an earlier version of this story, the financial-target timescale for Philips was corrected.)