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European stocks dropped for a second day, pushing the Stoxx Europe 600 Index to its lowest level since December, as Greece called a new election after the country’s politicians failed to form a government.
Greece will hold its new vote as early as next month as polls showed that the anti-austerity Syriza group could win the ballot. The failure to form a government committed to austerity has reignited concern that the country will leave the euro area.
Gross domestic product in the 17-nation euro area stagnated in the first quarter compared with the final three months of 2011, according to the European Union’s statistics office in Luxembourg. The median forecast of economists had called for a 0.2 percent contraction. Germany’s economy expanded 0.5 percent, compared with the 0.1 percent median estimate of economists in a separate survey.
National benchmark indexes fell in every western-European market except Norway and Ireland. The U.K.’s FTSE 100 lost 0.5 percent and France’s CAC 40 lost 0.6 percent. Germany’s DAX retreated 0.8 percent. Greece’s ASE Index plunged 3.6 percent to its lowest level since November 1992.
UniCredit SpA and Intesa Sanpaolo SpA, the biggest Italian lenders, declined 5.5 percent to 2.53 euros and 5.5 percent to 97.65 euro cents, respectively, after Moody’s Investors Service cut the credit ratings of 26 of the nation’s lenders, citing weakened earnings and the domestic economic outlook.
Vivendi SA added 2 percent to 12.68 euros after reporting profit that exceeded analysts’ estimates. First-quarter net income, excluding one-off gains or losses and some costs, fell 13 percent to 823 million euros. That beat the 765 million-euro average of analyst estimates.
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