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European stocks fell, after posting their biggest weekly advance in more than a month, as world leaders meet to discuss tension over Ukraine, and manufacturing gauges for China, Germany and the U.S. slipped.
The Stoxx Europe 600 Index fell 1.1 percent to 324.38 at 4:12 p.m. in London. The benchmark gauge advanced 1.8 percent last week as Russian President Vladimir Putin said he won’t seek territory beyond Crimea.
“As investors are nervous amid the Crimea crisis and apparent problems in the Chinese economy, stronger numbers would have been important for a continued positive development of the stock markets,” said Martin Schlatter, a fund manager at Swiss Rock Asset Management in Zurich, which oversees about $1 billion. “A confrontation between the West and Russia is absolutely unwanted.”
Leaders of the U.S., the European Union, China, Japan and others meet today as concern grows that Russia is massing soldiers on Ukraine’s border. U.K. Foreign Secretary William Hague wrote in yesterday’s Sunday Telegraph that Russia’s troop buildup means the crisis may worsen, calling the situation the most serious risk to European security in the 21st century.
In China, a preliminary report showed manufacturing weakened for a fifth straight month in March. The Purchasing Manager’s Index from HSBC Holdings Plc and Markit Economics dropped to 48.1, compared with the 48.7 median estimate of analysts. The number compares with February’s final 48.5 figure. Numbers above 50 signal expansion.
Separate preliminary data showed that a gauge of manufacturing and services in the euro area declined to 53.2 in March, matching forecasts, from 53.3 the previous month. Manufacturing fell to 53.8 from 54.8 in Germany. In the U.S., it slipped to 55.5 from 57.1, compared with the drop to 56.5 that economists had forecast.
National benchmark indexes retreated in all 18 western-European markets today, except Iceland.
FTSE 100 6,520.39 -36.78 -0.56% CAC 40 4,276.34 -58.94 -1.36% DAX 9,188.77 -154.17 -1.65%
KPN (KPN) fell 4.3 percent to 2.55 euros. Citigroup lowered the Dutch telecommunications operator to neutral from buy, meaning it no longer recommends investors purchase the stock. The brokerage said the risk of a failure of the O2/E-Plus deal is rising, while adding that it will still probably close.
Stada Arzneimittel slumped 15 percent, the most since September 2011, to 29.40 euros. The maker of generic drugs said it no longer expects to achieve its forecast for 2014, citing the strong devaluation of the Russian ruble and the Ukrainian hryvnia amid the Crimean crisis. Russia accounted for 19 percent of the company’s sales in 2012, while Ukraine contributed another 1.7 percent.
Centrica Plc slid 1.9 percent to 331.5 pence, and SSE Plc dropped 2.3 percent to 1,475 pence. Industry regulator Ofgem said it will publish a report this month on the state of competition in the energy market. Its assessment may lead to a referral of Britain’s “Big Six” suppliers to the Competition Markets Authority and a possible breakup of their operations, the Sunday Times reported.
CEZ rallied 5.1 percent to 569 koruna, the most since November. The Czech government, which controls 70 percent of the company, will demand a dividend payout of 100 percent of CEZ’s 2013 net income, Hospodarske Noviny reported, citing Finance Minister Andrej Babis. That’s up from the previous policy of 50 percent to 60 percent net income payout.
Deutsche Post AG climbed 1.7 percent to 26.09 euros. Welt am Sonntag reported that Europe’s largest postal company is seeking to lift its mail earnings by 60 percent and generate about 1.6 billion euros ($2.2 billion) of operating profit from its mail unit, the newspaper said, citing supervisory board members it didn’t specify.
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