Photographer: Jasper Juinen/Bloomberg

Miners, Banks Drag Europe Stocks Lower Amid Global Growth Fears

  • Economic data, ECB rate meeting on Thursday to be analyzed
  • Ahold advances after posting better-than-exepected profit

Stocks in Europe declined for a second day as investor concern about global growth prospects intensified amid mixed manufacturing reports before tomorrow’s European Central Bank policy meeting.

Miners fell the most of the Stoxx Europe 600 Index’s 19 industry groups as Chinese manufacturing data failed to ease anxiety over the nation’s economic outlook. Italian banks helped drag lenders lower after a report that they may be asked to inject additional funds into the country’s resolution fund.

The Stoxx 600 retreated 1 percent at the close of trading, its biggest decline in almost two weeks. As the ECB prepares to announce its rate decision, attention will also focus on President Mario Draghi’s press briefing afterwards, as data today showed euro-area manufacturing barely grew in May.

“The recovery in Europe is not accelerating and we have a very, very heavy week for data still ahead of us, so you can forgive people for a wait-and-see mood,” said William Hobbs, head of Europe, Middle East and Africa investment strategy at the wealth-management unit of Barclays Plc in London. “Markets are trapped a little bit, people are worried about geopolitics and the British referendum. This is keeping investors on the sidelines in case the worst-case scenario comes through.”

As the June 23 vote on Britain’s membership of the European Union approaches, polling is inconclusive. The chiefs of companies including Siemens AG, Airbus Group SE and GKN Plc have warned that leaving the EU would endanger future investment and manufacturing jobs. The FTSE 100 Index dropped 0.6 percent today.

In the U.S., data today showed manufacturing output expanded faster in May than estimated. Investors will also parse Friday’s payroll figures for clues as to whether the world’s biggest economy can cope with another rate increase. Traders are pricing in a 22 percent chance of a hike in June, while July is the first month with at least even odds of a move.

After falling as much as 5.4 percent from an April 20 high, European shares regained momentum last week, posting their biggest advance since February. The Stoxx 600 added 1.8 percent in May, its best monthly gain since November.

Among shares moving on corporate news today, Elekta AB slid 4.2 percent after the Swedish maker of medical devices posted disappointing fourth-quarter revenue and profit, and forecast weak results for the first half of the year. Royal Ahold NV rose 2.5 percent after the Dutch grocery chain that’s merging with Delhaize Group reported better-than forecast first-quarter profit. 

Kuka AG added 1.6 percent after German Economy Minister Sigmar Gabriel called for a European suitor to make a counterbid to stop a Chinese takeover of the robot maker.

Before it's here, it's on the Bloomberg Terminal.