BLBG: European Stocks Fall With Miners, Carmakers Before Yellen Speaks
(Bloomberg) -- European stocks fell for a second day, erasing earlier gains, before a Federal Reserve policy decision.
The Stoxx Europe 600 Index lost 0.3 percent to 396.28 at 10:31 a.m. in London, erasing an advance of as much as 0.3 percent. Miners and auto shares posted the biggest declines. The benchmark measure fell the most in a week on Tuesday after disappointing German investor confidence data. It has still surged 16 percent this year amid quantitative-easing measures by the European Central Bank.
Investors are waiting to see whether Fed officials will drop a reference to be “patient” with raising rates in the world’s biggest economy. Chair Janet Yellen holds a press conference after European markets close, following a rate decision. Economists forecast no change this month.
“We expect Dr. Yellen to lose her ‘patient’ and thereby signal that the potential lift-off date for U.S. interest rates has moved closer,” said Guy Foster, head of research at Brewin Dolphin Securities Ltd. “Changing the statement language commits her to nothing, and still leaves the press conference to discuss how data-dependent the Fed will be.”
Weaker-than-forecast U.S. economic reports since Friday have stoked speculation the Fed may not rush to increase rates. Standard & Poor’s 500 Index futures slipped 0.2 percent.
U.K. Budget
U.K. stocks climbed 0.6 percent. Chancellor of the Exchequer George Osborne presents his budget at 12:30 p.m. in London, the government’s last before a May 7 general election. Osborne has said it will include help for North Sea oil and gas companies.
“We expect the Chancellor to be in a position to present upgraded growth forecasts,” said Foster. “Aside from further pension liberalisation measures - such as allowing pensioners to sell their annuities, we can expect to see cuts to personal allowance, a reduction to the supplementary charge on North Sea oil and gas profits, and some cuts to alcohol duties.”
Miners and carmakers posted the worst performances among 19 Stoxx 600 industry groups. Fresnillo Plc and ArcelorMittal declined more than 1.9 percent.
Renault SA and Bayerische Motoren Werke AG lost more than 4.8 percent. An index of European automakers fell for a second day, after rising to a record on Monday.
Among stocks moving on corporate news, SBM Offshore NV jumped 7.1 percent after agreeing to cooperate with Brazilian authorities investigating companies for corrupt contracts with state-run Petroleo Brasileiro SA. SBM said the accord provides a framework for settlement.
Standard Chartered Plc climbed 6.1 percent after analysts at Barclays Plc and Sanford C. Bernstein Ltd. upgraded the bank, citing the appointment of Bill Winters as chief executive officer and a diminishing need to raise capital.
Inditex SA gained 2.4 percent. The world’s largest clothing retailer reported annual profit that met estimates, while sales rose 13 percent at the start of the first quarter.
Greece’s ASE Index slid 4 percent for the worst performer among 18 western-European markets, as National Bank of Greece SA and Alpha Bank AE lost more than 8.5 percent.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Namitha Jagadeesh
