European Stocks Give Up Gains as Banks, Energy Shares Declineby and
Stoxx 600 was up most of the day, as much as 1% earlier
Nestle leads food stocks down on underwhelming sales outlook
European stocks gave up almost all the gains they had held on to for the better part of the day, as investors sold shares most closely linked with economic growth.
Banks, miners and energy shares slid, with the Stoxx Europe 600 Index following oil lower after a report showing U.S. crude inventories advanced to an 86-year high.
The regional benchmark added less than 0.1 percent at the close of trading, paring an advance of much as 1 percent. It fell as much as 0.6 percent earlier. A gauge of euro-area stock volatility reversed losses to snap a four-day declining streak.
The Stoxx 600 fell to a 2013 low last week amid a slew of woes this year, from concern over global growth to a deepening oil slump, a rout in banks and dissipating faith in central-bank support. It has since rebounded more than 8 percent, including yesterday’s rally driven by miners.
“We look for some recovery for the next few weeks but the jury is still out,” said Christian Gattiker, head of research at Julius Baer Group Ltd. in Zurich. “We don’t buy the junk and what’s been bashed most. It’s premature to buy back into bank stocks.”
Lenders, the most battered among European peers this year, led losses. The group slumped to a three-year low last week amid worries over bad loans at Italian banks, the impact of a low-rate environment on profits and Deutsche Bank AG’s creditworthiness. Banca Monte dei Paschi di Siena SpA, UniCredit SpA and CaixaBank SA slipped at least 5.6 percent today.
Anglo American Plc and Rio Tinto Group led miners lower, after yesterday’s 8.1 percent rally pushed commodity producers into a bull market and erased their losses for the year.
Tullow Oil Plc tumbled 11 percent, leading declines in energy stocks, after saying it discovered a potential technical issue at its production vessel offshore Ghana.
Nestle SA lost 3.7 percent after forecasting 2016 sales that will miss its long-term target. Air France-KLM Group and Centrica Plc jumped 6.9 percent or more after reporting earnings that topped projections.