BLBG:European Stocks Fall With Euro on German Manufacturing
European stocks fell the most in three weeks and the euro weakened as German manufacturing unexpectedly shrank. Shares in China rose after data signaled the country’s factory output grew more than forecast.
The Stoxx Europe 600 Index lost 0.5 percent at 9:40 a.m. in London, the most on a closing basis since Feb. 26. Standard & Poor’s 500 Index futures slipped less than 0.1 percent. The euro declined 0.2 percent to $1.2904. The Shanghai Composite Index rose 0.3 percent. Oil retreated 0.7 percent. The yen strengthened 0.6 percent against the dollar, rebounding from yesterday’s 0.9 percent slump, and yields on Japan’s 10-year notes dropped to the lowest since 2003 as markets awaited Haruhiko Kuroda’s first press briefing as central bank governor.
A purchasing managers’ index for Germany’s manufacturing industry unexpectedly slid to 48.9 this month and services fell to 51.6. The preliminary reading of PMI in China was 51.7 in March, according to a statement from HSBC Holdings Plc and Markit Economics today. Kuroda, who yesterday took the helm at the BOJ, will announce a policy shift today, the Nikkei newspaper reported, without citing anyone.
“German economic data is the lung of the European economy,” said Yves Marcais, an equity sales trader at Global Equities in Paris. “When things there slow, it weighs on confidence.”
Lanxess Falls
The Stoxx 600 fell for the fourth time in five days, bringing the decline from last week’s 4 1/2-year high to 1.2 percent. Lanxess AG sank 5.9 percent, the most since July, as the German chemical maker forecast a larger-than-estimated drop in profit amid weakening demand in the tire and automotive industries. BASF SE, the world’s biggest chemical company, retreated 2.5 percent and Brussels-based Solvay SA lost 4 percent.
The decline in S&P 500 futures indicated the U.S. gauge will pare yesterday’s 0.7 percent rally. Oracle Corp. (ORCL) sank 7.3 percent in pre-market New York trading as the technology company reported sales and profit that missed analysts’ estimates.
Purchases of previously owned U.S. homes probably rose in February to the highest level in more than three years, economists said before a report from the National Association of Realtors due at 10 a.m. New York time today.
Sales increased 1.6 percent to a 5 million annualized rate, the most since November 2009, according to the median forecast of 77 economists surveyed by Bloomberg. Other data may show an index of leading economic indicators advanced for a third straight month.
Li & Fung Ltd., a Hong Kong-based supplier to Wal-Mart Stores Inc. and Target Corp., fell 2.2 percent in German trading after reporting following the close of markets in Asia that profit dropped for the first time in four years as a sluggish U.S. economy damped orders.
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To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net;
