European stocks retreated for the third time in four days as a slump in a U.K. house-price gauge fueled concern that the equities rally has outpaced prospects for the economy.
Punch Taverns Plc, the largest U.K. pub owner, tumbled 9.7 percent after reporting a 218 million-pound ($346 million) impairment charge. Nobel Biocare Holding AG sank 9.4 percent as UBS AG downgraded the world’s biggest maker of dental implants. Daimler AG led auto-industry stocks higher as UBS AG recommended the second-largest maker of luxury cars.
The benchmark Stoxx Europe 600 Index lost 0.6 percent to 261.58 at 2:56 p.m. in London as three stocks fell for every one that rose. The measure has climbed 13 percent from this year’s low in May, pushing the gauge’s valuation to 15.5 times the reported earnings of its companies, according to data compiled by Bloomberg.
“We are pretty cautious on equities,” Richard Cookson, global chief investment officer at Citigroup Inc.’s Private Bank in London, said on Bloomberg Television’s On The Move with Francine Lacqua. “One would want to pare one’s exposure into this rally.”
The Stoxx 600 rose 1.2 percent last week amid speculation that the U.S. Federal Reserve will announce plans to stimulate economic growth at its Nov. 2-3 meeting. The Fed will release minutes from its September gathering after the close of European equity markets today. The Bank of England must not tighten monetary policy too soon and risk hurting an “immature” economic recovery, policy maker David Miles said today.
U.K. House Prices
The number of U.K. real-estate agents and surveyors saying prices fell exceeded those reporting gains by 36 percentage points last month, down from minus 32 points in August, the Royal Institution of Chartered Surveyors said. A measure of price expectations fell to minus 41, the lowest level since March 2009.
The BOE’s benchmark interest rate will probably stay close to a record low for the next two years as the U.K. economy weathers “stormy seas,” said Philip Green, the billionaire owner of Arcadia Group Ltd.
“The worst hopefully is behind,” the retail magnate said in an interview with Bloomberg Television late yesterday in London. “Do I think there’s still some stormy seas? Yes,” he said, predicting that U.K. interest rates “don’t go far for the next 18 months, two years.”
French Strikes
National benchmark indexes fell in all but one of the 18 western European markets. The U.K.’s FTSE 100 and Germany’s DAX declined 0.6 percent. France’s CAC 40 Index sank 1.2 percent as workers demonstrated for the fourth time in five weeks against the government’s overhaul of the pension system and labor unions threatened open-ended strikes.
Punch Taverns sank 9.7 percent to 81.25 pence after writing down the value of its pubs. Pretax profit excluding one-time items fell to 131 million pounds in the year ended Aug. 21, compared with 160 million pounds in the same period a year earlier, the company said in a statement.
Nobel Biocare slid 9.4 percent to 16.94 Swiss francs, the biggest decline in two months, as UBS downgraded its recommendation on the shares to “sell” from “neutral.”
ArcelorMittal, the world’s biggest steelmaker, retreated 1.8 percent to 24.42 euros after South Korean rival Posco cut its full-year profit forecast by 7 percent and reported the first decline in earnings in four quarters. ThyssenKrupp AG, Germany’s largest steelmaker, fell 1.7 percent to 25.23 euros.
Soco Slides
Soco International Plc, a U.K. energy explorer in Africa and Southeast Asia, plunged 18 percent to 372.9 pence, the biggest intraday drop in more than four years. The company said it will plug and abandon its appraisal well offshore Vietnam.
Safran SA dropped 2.1 percent to 20.16 euros. Areva SA sold a 3.65 percent stake in Europe’s second-biggest aircraft-engine maker for 20.23 euros a share.
Audika SA, the French hearing-aid retailer, dropped 6.5 percent to 18.05 euros as it reported a decline in third-quarter revenue to 19.8 million euros ($27.5 million) from 20.7 million euros a year earlier.
Daimler rose 3 percent to 47.32 euros, with automakers posting the biggest gain among industry groups rising on the Stoxx 600 today. UBS raised the luxury-car maker to “buy” and increased its price estimate by 36 percent to 53 euros, saying it expects a faster recovery in profits for trucks.
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Punch Taverns Plc, the largest U.K. pub owner, tumbled 9.7 percent after reporting a 218 million-pound ($346 million) impairment charge. Nobel Biocare Holding AG sank 9.4 percent as UBS AG downgraded the world’s biggest maker of dental implants. Daimler AG led auto-industry stocks higher as UBS AG recommended the second-largest maker of luxury cars.
The benchmark Stoxx Europe 600 Index lost 0.6 percent to 261.58 at 2:56 p.m. in London as three stocks fell for every one that rose. The measure has climbed 13 percent from this year’s low in May, pushing the gauge’s valuation to 15.5 times the reported earnings of its companies, according to data compiled by Bloomberg.
“We are pretty cautious on equities,” Richard Cookson, global chief investment officer at Citigroup Inc.’s Private Bank in London, said on Bloomberg Television’s On The Move with Francine Lacqua. “One would want to pare one’s exposure into this rally.”
The Stoxx 600 rose 1.2 percent last week amid speculation that the U.S. Federal Reserve will announce plans to stimulate economic growth at its Nov. 2-3 meeting. The Fed will release minutes from its September gathering after the close of European equity markets today. The Bank of England must not tighten monetary policy too soon and risk hurting an “immature” economic recovery, policy maker David Miles said today.
U.K. House Prices
The number of U.K. real-estate agents and surveyors saying prices fell exceeded those reporting gains by 36 percentage points last month, down from minus 32 points in August, the Royal Institution of Chartered Surveyors said. A measure of price expectations fell to minus 41, the lowest level since March 2009.
The BOE’s benchmark interest rate will probably stay close to a record low for the next two years as the U.K. economy weathers “stormy seas,” said Philip Green, the billionaire owner of Arcadia Group Ltd.
“The worst hopefully is behind,” the retail magnate said in an interview with Bloomberg Television late yesterday in London. “Do I think there’s still some stormy seas? Yes,” he said, predicting that U.K. interest rates “don’t go far for the next 18 months, two years.”
French Strikes
National benchmark indexes fell in all but one of the 18 western European markets. The U.K.’s FTSE 100 and Germany’s DAX declined 0.6 percent. France’s CAC 40 Index sank 1.2 percent as workers demonstrated for the fourth time in five weeks against the government’s overhaul of the pension system and labor unions threatened open-ended strikes.
Punch Taverns sank 9.7 percent to 81.25 pence after writing down the value of its pubs. Pretax profit excluding one-time items fell to 131 million pounds in the year ended Aug. 21, compared with 160 million pounds in the same period a year earlier, the company said in a statement.
Nobel Biocare slid 9.4 percent to 16.94 Swiss francs, the biggest decline in two months, as UBS downgraded its recommendation on the shares to “sell” from “neutral.”
ArcelorMittal, the world’s biggest steelmaker, retreated 1.8 percent to 24.42 euros after South Korean rival Posco cut its full-year profit forecast by 7 percent and reported the first decline in earnings in four quarters. ThyssenKrupp AG, Germany’s largest steelmaker, fell 1.7 percent to 25.23 euros.
Soco Slides
Soco International Plc, a U.K. energy explorer in Africa and Southeast Asia, plunged 18 percent to 372.9 pence, the biggest intraday drop in more than four years. The company said it will plug and abandon its appraisal well offshore Vietnam.
Safran SA dropped 2.1 percent to 20.16 euros. Areva SA sold a 3.65 percent stake in Europe’s second-biggest aircraft-engine maker for 20.23 euros a share.
Audika SA, the French hearing-aid retailer, dropped 6.5 percent to 18.05 euros as it reported a decline in third-quarter revenue to 19.8 million euros ($27.5 million) from 20.7 million euros a year earlier.
Daimler rose 3 percent to 47.32 euros, with automakers posting the biggest gain among industry groups rising on the Stoxx 600 today. UBS raised the luxury-car maker to “buy” and increased its price estimate by 36 percent to 53 euros, saying it expects a faster recovery in profits for trucks.
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