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European stocks retreated from a five-month high as UniCredit rights offer boosted concern that banks will need to raise more capital to weather the region’s debt crisis.
Germany got bids for 5.14 billion euros ($6.7 billion) of 10-year bunds at an auction, more than the maximum sales target of 5 billion euros. The debt agency accepted bids for 4.06 billion euros at an average yield of 1.93 percent. Portugal’s borrowing costs fell at a sale of 1 billion euros of three-month bills.
National benchmark indexes fell in all of Europe’s 18 western markets, except Iceland and Switzerland. France’s CAC 40 Index dropped 1.6 percent, the U.K.’s FTSE 100 Index slipped 0.6 percent and Germany’s DAX Index lost 0.9 percent.
UniCredit tumbled 14 percent, the largest decline since at least 1988, as the bank said it will sell shares at 1.943 euros apiece to raise 7.5 billion euros. The rights offer is a 43 percent discount to yesterday’s closing price, excluding the value of rights.
Vestas sank 19 percent, the lowest price since 2003, after cutting its earnings forecasts and saying it will announce a significant change to its corporate structure on Jan. 12.
Next dropped 3.1 percent after it reported sales that missed analyst estimates as growth in online revenue failed to offset lower store sales during a period that included the peak Christmas holiday season.
Larger rival Marks & Spencer Group Plc sank 2.6 percent. Home Retail Group Plc, the owner of Homebase outlets in the U.K., slumped 3.5 percent.
Qiagen NV the German biotechnology company, increased 3.2 percent as analysts at JPMorgan Chase & Co. raised the stock to “overweight” from “neutral.”
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