European Stocks Fall as Energy, Miner Drops Outweigh Bank Rally

  • Commerzbank advances after report about possible merger
  • Oil slides after U.S. stockpiles increase more than expected

European Stocks Finish Lower After Losing Early Gains

European stocks fell as declines in commodity and energy producers outweighed the best month for banks in more than a year.

Miners posted their lowest levels since July 8, and oil companies slid after data showed a bigger-than-expected increase in U.S. crude inventories. Commerzbank AG and Deutsche Bank AG rose at least 2.5 percent after Manager Magazin reported Deutsche Bank considered a potential merger. Greek lenders pushed the ASE Index to the best performance among western-European markets after Piraeus Bank SA and Alpha Bank AE released earnings.

The Stoxx Europe 600 Index lost 0.4 percent at the close of trading, erasing gains of as much as 0.4 percent after the oil data, and paring its monthly advance to 0.5 percent. Shares oscillated throughout August amid seasonally-low trading volume and record outflows from the region’s equity funds. The equity gauge, which briefly erased its post-Brexit drop, is now 0.8 percent below its close on June 23.

“If oil is down, it is negative for the oil and commodity stock markets,” said Ralf Zimmermann, an equity strategist at Bankhaus Lampe KG in Dusseldorf, Germany. “It is driving down the overall stock market as well. My impression is, after the really decent gains we have seen in markets, it’s really more time for a break.”

European banks posted their best monthly performance since February 2015, helped by better-than-forecast results in the past earnings season. BHP Billiton Ltd. and Rio Tinto Group led declines among commodity producers as Clarksons Platou Securities Inc. warned that iron ore prices face renewed pressure.

Among stocks moving on corporate news today: 

  • Ryanair Holdings Plc slipped 1.2 percent after warning it won’t be able to cut spending fast enough to compensate if a drop in ticket prices accelerates this winter.
  • Straumann Holding AG retreated 5.3 percent, the most since January 2015, after Singapore’s sovereign wealth fund GIC Pte reduced its stake in the Swiss dental-implant manufacturer.
  • Bouygues SA added 1.1 percent after the French building, media and telecommunications company said average revenue per mobile user stabilized and it reiterated a 2016 target to improve profitability. 
  • Iliad SA gained 4.1 percent after the low-cost phone carrier reported an increase in first-half sales and earnings as it won customers amid new promotions. 
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