By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—Major oil companies pressured European stock markets on Tuesday as crude-oil prices moved lower, while heavyweight banks declined as last week’s risk rally continued to run out of steam.
The Stoxx Europe 600 index XX:SXXP -0.39% dropped 0.6% to 273.43. On Monday, the index shed 0.3%, as investors paused for breath after stocks rallied on Friday on the back of fresh quantitative-easing measures from the U.S.
“I think it’s the usual ebb and flow in market moves. To be fair, we have had a decent rally over the course of the last week or two and we’re seeing some profit-taking,” said Peter Dixon, strategist at Commerzbank in London.
“People tend to sit around and think if they want to drive the market higher and it’s probably going to be like this for the next few days,” he added. “The general expectation is that there is still enough good news to drive markets higher over the next few weeks.”
Chemicals firm Akzo Nobel NV NL:AKZA -4.85% was among the biggest decliners, down 5.1%, after it said Chief Executive Ton Buechner is taking temporary leave as a result of a medical condition. See: Akzo Nobel CEO to take leave until October.
For the broader stock markets, oil firms added pressure, as oil prices continued to decline. Crude-oil prices for October delivery CLV2 -0.54% dropped more than $2 Monday on talk of a possible Strategic Petroleum Reserve release. Prices continued to push lower on Tuesday. See: Oil remains lower after prior-day tumble
Norway’s Statoil ASA NO:STL -0.98% fell 1.1%. Among U.K. oil firms, BP PLC UK:BP -2.46% BP -1.35% slumped 2.3%, BG Group PLC UK:BG -2.25% lost 2.4% and Royal Dutch Shell PLC UK:RDSB -0.75% RDS.B -0.19% ticked 0.7% lower.
Mining firms were also on the decline, as most metals prices dropped on demand concerns after Australia, the world’s biggest exporter of iron ore, cut its revenue forecast for the steel making ingredient. See: Australia resource minister: projects at risk.
Rio Tinto PLC UK:RIO -1.28% RIO -2.82% AU:RIO -0.43% lost 2%, BHP Billiton PLC UK:BLT -1.73% BHP -1.41% AU:BHP -0.56% gave up 1.9% and Anglo American PLC UK:AAL -1.28% slipped 1.5%.
Losses for oil companies and miners weighed on the FTSE 100 index UK:UKX -0.54% , which slumped 0.6% to 5,856.33. Read more about U.K. stocks.
Elsewhere, Spain was in focus, as the government sold slightly more than planned in a 12- and 18-month treasury bill auction and at lower borrowing costs compared with an auction held a month ago. See: Spain borrowing costs fall at bill auction.
Investors also kept an eye on the country’s debt in the secondary market, after bond yields climbed on Monday, as Madrid remained reluctant to ask for financial aid from the euro zone’s rescue funds. A formal request for help is a prerequisite to gain support from the bond-buying program outlined earlier this month by the European Central Bank.
“Everybody thinks they are going to ask for it eventually. It’s just a waiting game at the moment,” said Dixon from Commerzbank.
