By Julie Cruz May 21 (Bloomberg) -- European stocks fell to a six-month low as concern grew that the region’s governments lack a common position on how to resolve the debt crisis. Asian equities sank for a sixth day, while U.S. index futures gained. TrygVesta A/S, the Nordic region’s second-largest property and casualty insurer, tumbled 6.5 percent after reporting a surprise first-quarter loss. Lanxess AG and K+S AG slipped more than 4 percent after analysts downgraded the shares. The VStoxx Index, which measures the cost of protecting against declines in the Euro Stoxx 50 Index, rose 2.7 percent to 51.24, on course for the highest close in 16 months. The benchmark Stoxx Europe 600 Index slid 0.9 percent to 236.19 at 9:54 a.m. in London after the U.S. Standard & Poor’s 500 Index yesterday plunged the most in 14 months. The Stoxx 600 has slumped 4.9 percent this week, on course for the fifth weekly decline in six, amid concern that Europe’s debt crisis will hurt the economic recovery. “If the rescue program fails altogether, we are looking at a potentially much more negative picture, with the distinct possibility of a double-dip recession,” Deutsche Bank AG strategists including London-based Joelle Anamootoo wrote in a report. “Because of the large negative risks associated with failure to implement an effective rescue package, European authorities have every incentive to strive to do so, and we continue to expect them to do so. Unfortunately, early returns on this score have not been uniformly encouraging.” Short Sales Germany’s BaFin markets regulator this week prohibited investors from naked short sales -- speculating on declines in companies they don’t own -- for 10 banks and insurers, as well as naked credit-default swaps on euro-area government bonds. France said it wouldn’t follow Germany in introducing a ban and Italy’s Il Sole 24 Ore newspaper said Germany didn’t tell the European Central Bank before its move, citing ECB policy maker Jose Manuel Gonzalez-Paramo. The MSCI Asia Pacific Index plunged 1.4 percent to a nine- month low today, while futures on the S&P 500 rose 0.3 percent. The plunge in global stocks has wiped $5.3 trillion off market value this month. In less than two weeks the Stoxx 600 has erased almost all of the gains that followed the EU’s unveiling of a 750 billion- euro ($939 billion) loan package aimed at stopping the euro region’s weakest members from defaulting. German lawmakers are set to vote today on whether to back the bailout. $12 Billion The Stoxx 600 has fallen 13 percent from this year’s peak on April 15. The slide has left the measure trading at 14.4 times its companies’ reported earnings, the cheapest valuation since 2008. Investors withdrew some $12 billion from U.S. and European equity funds in the week to May 19, the most in almost two years, according to EPFR Global. German Finance Minister Wolfgang Schaeuble will present a nine-point plan to his euro-area counterparts aimed at avoiding a repeat of the fiscal crisis touched off by Greece’s budget deficit. The proposal includes calls for faster budget cuts, tougher penalties for countries that flout the rules and the option of an “orderly state insolvency” for euro countries. U.S. Treasury Secretary Timothy F. Geithner will visit Germany and the U.K. next week to discuss the European debt crisis, the Treasury said. He will meet U.K. Chancellor of the Exchequer George Osborne, European Central Bank President Jean- Claude Trichet and Germany’s Schaeuble. Confidence Drops German business confidence unexpectedly fell last month. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, eased to 101.5 from 101.6 in April. Economists expected an increase to 101.9, according to the median of 37 forecasts in a Bloomberg News survey. Ifo’s gauge of executives’ expectations fell to 103.7 from 104. TrygVesta sank 6.5 percent to 334.9 kroner. The insurer reported a first-quarter net loss of 102 million kroner ($17 million) compared with an average estimate of 42 million kroner profit in a Bloomberg survey of six analysts. Lanxess fell 4.2 percent to 30.50 euros. Germany’s largest publicly-traded specialty chemicals maker was cut to “underperform” from “neutral” at BofA Merrill Lynch. K+S slid 4 percent to 36.97 euros, the lowest intraday level since November. Europe’s largest potash producer was cut to “underperform” from “outperform” at CA Cheuvreux, which said the company “trades at a premium to its peers despite inferior margins.” Wacker Chemie AG dropped 2.7 percent to 97.12 euros as the German chemical maker was cut to “equal weight” from “overweight” at Morgan Stanley. The brokerage said it sees “limited upside to consensus estimates in the near term” and “a better balance of risk and reward elsewhere in the sector.” Porsche SE fell 4.1 percent to 33.31 euros as the maker of the 911 sports car that’s combining with Volkswagen AG was cut to “neutral” from “buy” at Goldman Sachs Group Inc., which cited “limited sector-relative upside.” PSA Peugeot Citroen gained 1.1 percent to 19.04 euros as Goldman Sachs upgraded the French automaker to “buy” from “neutral.” To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net;

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