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European stocks declined for a fifth day as the World Bank downgraded global growth forecasts and Jean-Claude Juncker, who heads the euro group of finance ministers, said the strength of the euro currency threatens the region’s economy.
The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations.
The Washington-based bank yesterday projected the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. It cut the U.S. projection by 0.5 percentage point and predicted a second year of contraction in the euro region.
Juncker late yesterday called the euro’s value “dangerously high” after the 17-nation currency this week traded above $1.34 against the U.S. dollar for the first time since February last year. The euro has risen 8.4 percent gain against the dollar in the past six months.
Companies in the euro area will probably to cut dividends to the lowest level in four years as chief executive officers stockpile cash to weather the region’s sovereign-debt crisis.
Societe Generale and Credit Agricole retreated 4.3 percent to 32.05 euros, and 3.3 percent to 7.19 euros, respectively.
Tesco dropped 1.1 percent to 345.8 pence. The U.K.’s largest grocer said it withdrew some beef products after tests by the Food Safety Authority of Ireland found some contained horse DNA. Two types of frozen beef burger sold by Tesco in both the U.K. and Ireland had horse DNA, the company said in a Jan. 15 statement on its website.
Anglo American Plc, the largest platinum producer, fell 4 percent to 1,882 pence. The African National Congress said South Africa’s government should withdraw mining licenses from the company’s Amplats unit. The business, also known as Anglo American Platinum Ltd., said yesterday that it will idle four shafts in South Africa, cutting production of the precious metal by 400,000 ounces a year and firing as many as 14,000 workers.
Lonmin Plc, the third-largest platinum producer, tumbled 4.7 percent to 329.6 pence.
FTSE 100 6,086.12 -31.19 -0.51%
CAC 40 3,690.61 -6.74 -0.18%
DAX 7,653.01 -22.90 -0.30%
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