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European and Asian stocks fell to a two-month low, euro-area government bonds declined and most emerging-market currencies weakened. The yen snapped a two-day rally while nickel rose to a five-week high.
The Stoxx Europe 600 Index declined 0.6 percent and touched the lowest level since Oct. 14.
More economists are predicting the Federal Reserve will taper its stimulus as soon as next week and U.S. retail-sales data today will add to signs of growth, according to analyst estimates. Chinese policy makers meet this week to set growth targets for 2014 while central banks in Indonesia, New Zealand, South Korea and Switzerland maintained their benchmark interest rates today. European Central Bank policy maker Peter Praet said assessing sovereign-bond risks in a stress test may discourage banks from using ECB funds to load up on government debt.
According to various sources, tapering is expected between January and March, so earlier could have some negative impact,” Christoph Riniker, head of strategy research at Julius Baer Group Ltd. in Zurich, said in an interview. “Our view is that there is no year-end rally as the performance in the year was very good and investors are too optimistic at the moment.”
John Wood Group Plc plunged 11 percent after predicting that earnings from its engineering division will probably drop 15 percent in 2014.
PSA Peugeot Citroen slid 9.4 percent after saying it will take a 1.1 billion-euro ($1.5 billion) charge. The French carmaker said its partnership with General Motors Co. will generate smaller savings than it had forecast.
Ziggo NV jumped 7 percent as the Dutch broadband provider said that Liberty Global Plc has revived talks to buy the company. People familiar with the matter said the U.S. cable TV operator may make a bid before the end of this year.
FTSE 100 6,446.6 -61.12 -0.94%
CAC 40 4,076.01 -10.85 -0.27%
DAX 9,012.02 -65.09 -0.72%