EUROPE REPORT:Eurostoxx 50: 2,782.63 (-19.81) Paris CAC: 3,780.93 (-33.17) Frankfurt DAX: 5,648.82 (-64.70)
EUROPEAN STOCKS dropped, trimming the Dow Jones Stoxx 600 Index’s biggest quarterly advance this decade, after a measure of US business activity unexpectedly shrank in September.
The Stoxx 600 sank 0.5 per cent to 242.47, erasing a gain of as much as 0.8 per cent, as the Institute for Supply Management-Chicago said its business barometer decreased to 46.1, worse than the lowest estimate of economists surveyed by Bloomberg News. Readings below 50 signal contraction.
“The report scared the market,” said Bruno Ducros, a Paris-based fund manager at CamGestion, which oversees $4.4 billion in stocks. “The data shows the level of demand so it is an important measure for future growth.”
Europe’s Stoxx 600 has soared 18 per cent since the end of June, the steepest quarterly increase since 1999, as the European Central Bank kept interest rates at a record low and the French and German economies unexpectedly moved out of recession.
US commerce department figures yesterday showed the world’s largest economy shrank at a 0.7 per cent annual rate from April through June, the best performance in more than a year.
Benchmark indexes dropped in 11 of the 18 western European markets yesterday.France’s CAC 40 slipped 0.5 per cent. Germany’s DAX lost 0.7 per cent.
Austria’s ATX, Ireland’s Iseq and Italy’s FTSE MIB were the best performers in western Europe this quarter, with each gauge advancing more than 23 per cent.
UCBsank 3.3 per cent to €28.84. The drugmaker is selling as much as €500 million of convertible bonds to diversify its financing before talks with lenders on debt refinancing begin.
Man Groupjumped 7.5 per cent to 331.2 pence.
Iberia Lineas Aereas de Espana SAgained 5.7 per cent to €2.13after the Financial Times reported that British Airways may complete a merger with Spain's largest airline by the end of the year, citing British Airways chief executive Willie Walsh.
Iberia will hold an extraordinary board meeting on Friday to discuss the British Airways merger after the two airlines reached an agreement on the UK carrier’s pension deficit. – (Bloomberg)
