European Stocks Drop as China Imports Unexpectedly Plunge
European stocks declined as a report showed Chinese imports unexpectedly slumped last month, outweighing gains by personal- and household-goods companies after LVMH Moet Hennessy Louis Vuitton SA posted results.
Tryg A/S lost 4 percent after reporting first-quarter net income that missed analysts’ estimates. LVMH added 3.2 percent as the world’s largest luxury-goods company posted the fastest growth in fashion and leather-goods sales in two years.
The Stoxx Europe 600 Index fell 0.5 percent to 333.41 at the close of trading. The benchmark earlier rose as much as 0.6 percent after the minutes of the Federal Reserve’s last meeting eased concern about when interest rates will increase. European equities have fallen 1.7 percent from a six-year high on April 4 as investors sold the shares with the highest valuations.
“One of the key markets is China,” Lex Van Dam, a London-based fund manager at Hampstead Capital LLP, said by telephone today. “Now the question is whether China will be a lot worse than people expect. In previous years, the support from the Fed was really there. This year people are more worried.”
In China, the customs administration reported that imports slid 11 percent in March from a year earlier. The median economist estimate had called for a gain of 3.9 percent, according to data compiled by Bloomberg.
In the U.S., the Federal Open Market Committee said that the revised forecasts for interest rates at its March 18-19 policy meeting did not mean the central bank’s policy would change, according to minutes released after European markets closed yesterday. “Several participants noted that the increase in the median projection overstated the shift in the projections,” the Fed said in the minutes.
Janet Yellen said in the press conference following the meeting that rates might start to rise about six months after the central bank halts its monthly asset purchases.
A Labor Department report showed that the number of people filing jobless claims in the world’s biggest economy fell to 300,000 in the week ended April 5. Economists had forecast a decline to 320,000, according to a Bloomberg survey.
Tryg lost 4 percent to 510.50 Danish kroner. The second-largest Nordic property and casualty insurer reported first-quarter net income of 455 million kroner ($84.7 million), missing the 516 million-krone average estimate of analysts. The company paid out 150 million kroner in large claims, more than it did in the same period a year earlier.
Iberdrola SA decreased 3.4 percent to 4.83 euros, leading a decline in utility companies. Bankia SA sold a 4.9 percent stake in Spain’s largest utility. Spain’s Red Electrica Corp. dropped 3.2 percent to 58.41 euros and Italy’s Enel SpA slipped 2.5 percent to 4.03 euros.
Royal Imtech NV tumbled 15 percent to 1.66 euros, its lowest price in 11 years. The technical-services provider said it would review all options to meet a debt-reduction target.
Vienna Insurance Group AG slid 5.8 percent to 35.42 euros as it restated its 2012 earnings following an audit of its BCR Life unit in Romania. Pretax profit fell 4.2 percent to 563.7 million euros, the insurer said in a statement.
LVMH gained 3.2 percent to 140.85 euros after reporting that first-quarter fashion and leather-goods sales climbed 9 percent on an organic basis, the fastest growth since the first quarter of 2012. Analysts had predicted growth of 6 percent.
Personal- and household-goods companies posted the biggest gain of the 19 industry groups in the Stoxx 600. Christian Dior SA increased 1.9 percent to 144.80 euros. The apparel maker, which is owned by LVMH chairman Bernard Arnault, reports its quarterly sales after the market closes today.
Hays Plc gained 4.6 percent to 151.4 pence. The recruitment company reported that net fee growth increased in Asia, Europe and the U.K. in the three months through March.
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