European Stocks Decline as Deutsche Bank Leads Lenders Lower

Deutsche Bank CEO John Cryan Tries a New Strategy

European stocks fell in a broad decline, following their best weekly gain since December, as mining shares dropped with copper prices and Deutsche Bank AG helped drag lenders lower.

The Stoxx Europe 600 Index fell 0.5 percent at the close. Deutsche Bank was the worst performer, slumping 7.9 percent after Chief Executive Officer John Cryan announced an overhaul that included offering 8 billion euros ($8.5 billion) in stock, selling part of the asset-management business and reintegrating Postbank. The CEO reversed course less than two years into his strategy.

  • Despite the Stoxx 600 slipping since last Wednesday, some analysts reiterated their positive outlooks. “Equities are continuing to defy numerous correction calls,” JPMorgan equity strategist Mislav Matejka wrote in a note. “Keep adding to banks and cyclicals as yields recouple with robust data flow. Euro-zone equities appear very interesting given a clear earnings upturn.”
  • Among stocks moving on corporate news, Standard Life Plc jumped 5.7 percent for the best performance on the Stoxx 600 after Scotland’s largest insurer agreed to acquire Aberdeen Asset Management Plc, creating one of Europe’s biggest fund managers. Aberdeen rose 4.2 percent.
  • PSA Group gained 2.7 percent on trading volume that exceeded thrice the three-month average after agreeing to buy General Motors Co.’s Opel unit in a transaction valued at 2.2 billion euros, creating Europe’s second-largest carmaker.
  • On Friday after the European market close, Federal Reserve Chair Janet Yellen all but declared that the central bank would increase rates for the first time this year at its March 14-15 meeting, saying that such a move “would likely be appropriate” if the economy stays on its current track. Fed funds futures now indicate a 98 percent chance of an increase in borrowing costs this month.

— With assistance by Elena Popina

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