European Stocks Retreat as Traders Shun Risk After Recent RallyBy
European stocks tumbled as investors questioned whether a rally that pushed equities to a 14-month high had gone too far.
The Stoxx Europe 600 Index slid 0.8 percent at the close in its biggest drop in more than three weeks, as all industry groups declined. Boosted by bets for stronger global growth and a pickup in inflation, the benchmark jumped 14 percent from a Nov. 4 low through Tuesday before losing steam.
Commodity producers, banks and carmakers, among the biggest winners in the recent rally, led declines on Friday. The gauge of miners fell for a third day, after climbing to its highest level since July 2014.
- Germany’s DAX Index tumbled 1.2 percent, breaking below the 11,900 technical support level that represented its January peak. The benchmark this week rose above 12,000 in intraday trading, but failed to sustain it on a closing basis.
- Some shares were active on corporate results. Vivendi SA dropped 3.9 percent as the media company forecast 2017 earnings below analysts’ estimates.
- BASF SE lost 2.9 percent after saying gloomy prospects for the European economy will weigh on the chemical maker’s outlook for profit growth this year.
- Europe’s stock volatility spread is showing little complacency of the sort seen before the Brexit referendum. The spread between April and May Europe stock volatility futures has climbed on French election risks, and is starting to outstrip the rally seen in the equivalent contracts heading into the U.K. vote.
— With assistance by Elena Popina
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