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European stocks fell, after the Stoxx Europe 600 Index rallied the most in a month, on concern that the Federal Reserve will reduce debt purchases as the economy strengthens. U.S. stock index futures dropped, while Asian shares advanced.
The Stoxx 600 retreated 1 percent to 305.06 at 9:57 a.m. in London. The equity benchmark is still heading for a 2.8 percent advance in May, its 12th monthly gain and longest streak since 1997. It has rallied 9.1 percent so far this year, bolstered by central-bank monetary stimulus.
The Fed buys $85 billion of Treasury and mortgage debt a month to support the economy by putting downward pressure on interest rates. Chairman Ben S. Bernanke said on May 22 the central bank may cut the pace of buying "in the next few meetings" if economic conditions improve.
German unemployment in May rose more than four times as much as economists estimated as the euro area's sovereign debt crisis and a long winter took their toll on Europe's largest economy.
The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million, the Nuremberg-based Federal Labor Agency said today. That's the fourth straight monthly gain. Economists had predicted an increase of 4,000, according to the median of estimates. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent.
The International Monetary Fund lowered its forecasts for China's growth to about 7.75 percent this year and next. In April, the IMF forecast growth of 8 percent this year and 8.2 percent in 2014.
Peugeot (UG) slid 3.1 percent to 7.13 euros. The carmaker is discussing an eventual capital increase, La Tribune reported, citing an unidentified person close to the matter. The Peugeot family has discussed what percentage of dilution would be acceptable for them, according to the newspaper. Pierre-Olivier Salmon, a spokesman at the company, declined to comment.
Kazakhmys Plc slumped 3 percent to 324 pence and Evraz declined 2.7 percent to 140 pence. The commodity producers will be removed from the Stoxx 600 from before the start of trading on June 24, according to a statement late yesterday.
H&M slipped 1.8 percent to 234.30 kronor in Stockholm. Goldman Sachs downgraded its rating on the shares to sell from neutral, with analyst Franklin Walding saying profitability at Europe's second-largest clothing retailer will suffer as customers shift to online shopping.
De La Rue Plc, a supplier of cash-handling equipment and security products, fell 1.1 percent to 975 pence. Revenue declined to 484 million pounds in the full year through March, less than the 509 million-pound profit analysts surveyed by Bloomberg had predicted.
FTSE 100 6,681.48 -80.53 -1.19%
CAC 40 4,009.56 -41.00 -1.01%
DAX 8,392.88 -87.99 -1.04%
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