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European stocks had the biggest two- day drop since April as concern grew that Greece will default and more Spanish regions will follow Valencia in seeking a bailout.
The troika of Greece’s international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- will arrive in Athens tomorrow amid doubts that the country will meet its bailout commitments. German Vice Chancellor Philipp Roesler said he’s “very skeptical” European leaders will be able to rescue Greece.
The IMF will stop paying further rescue aid to Greece, making the country’s insolvency in September more likely, Der Spiegel magazine reported yesterday, citing unidentified European Union officials.
Spain’s Balearic Islands and Catalonia are among six Spanish regions that may ask for aid from the central government after Valencia sought a bailout on July 20, El Pais reported, without citing anyone. Castilla-La-Mancha, Murcia, the Canary Islands and possibly Andalusia are also having difficulty funding themselves and some of these regions are studying plans to access the recently created emergency-loan fund that Valencia said it would use last week, the newspaper said.
A gauge of banks in the Stoxx 600 fell 3.1 percent, for the biggest drop among 19 industry groups. BNP Paribas, France’s biggest lender, slid 4.7 percent to 27.18 euros. Banco Santander SA declined 3.4 percent to 4.05 euros, extending last week’s 10 percent plunge. Bankia SA lost 7.9 percent to 57 euro cents.
BHP Billiton fell 3.3 percent to 1,757.5 pence. Petropavlovsk Plc, a producer of gold in Russia, retreated 4.5 percent to 382.5 pence. Lonmin Plc, the third- biggest platinum producer, sank 4.2 percent 678 pence.
Philips climbed 7.6 percent to 17.45 euros. The company reported an increase in second-quarter profit as Chief Executive Officer Frans van Houten extends a savings program into a second year. Earnings before interest, taxes, amortization and other one-time items rose to 450 million euros compared with 371 million euros a year earlier, the company said.
FTSE 100 5,559.19 -92.58 -1.64%
CAC 40 3,128.32 -65.57 -2.05%
DAX 6,519.27 -110.75 -1.67%
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