European Stocks Fall to Two-Week Low Before Fed Meeting

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By Namitha Jagadeesh

European stocks fell to a two-week low as investors awaited the outcome of the latest Federal Reserve meeting. U.S. stock futures were little changed, while Asian shares dropped.

Orange SA slid 1.3 percent and Jazztel Plc added 6.2 percent after the French company offered to buy the Spanish broadband provider for about 3.4 billion euros ($4.4 billion). Publicis Group SA gained 1.5 percent after saying it will appoint a new management team.

The Stoxx Europe 600 Index retreated 0.3 percent to 342.98 at 8:09 a.m. in London. The equity gauge declined yesterday amid disappointing Chinese factory data. Standard & Poor’s 500 Index futures slipped 0.1 percent today, while the MSCI Asia Pacific Index retreated 0.5 percent.

Fed officials will maintain interest rates at a record low at their two-day policy meeting that begins today, according to economists in a Bloomberg survey. Chair Janet Yellen holds a press conference tomorrow.

The Fed is assessing the strength of the world’s biggest economy as it winds down a bond-buying program and considers raising rates. The central bank has said that its benchmark rate will stay low for a considerable time after it completes the monthly bond purchases.

German Confidence

In Germany, a report at 11 a.m. Frankfurt time may show investor confidence fell for a ninth consecutive month. The ZEW Center for European Economic Research in Mannheim will say its index of investor and analyst expectations dropped to 5 in September from 8.6 in August, economists forecast in a Bloomberg survey. The gauge aims to predict economic developments six months in advance.

Investors are also waiting for the Sept. 18 referendum on Scottish independence. Polls have shown the vote is too close to call.

Orange declined 1.3 percent to 11.30 euros. The French carrier is bidding 13 euros for each Jazztel share, or 22 percent more than the stock’s Sept. 12 close in Madrid, the companies said yesterday. Jazztel climbed 6.2 percent to 12.79 euros. The Spanish company’s shares were suspended yesterday after they surged as much as 17 percent in intraday trading.

Asos Plc tumbled 14 percent to 2,085 pence. The U.K.’s largest online-only fashion retailer said it lost sales of 25 million pounds ($40.5 million) to 30 million pounds in the quarter through August because of a fire at a distribution center. The clothing retailer forecast full-year pretax profit in line with analyst estimates after adjusting for insurance proceeds.

Publicis advanced 1.5 percent to 57.26 euros after saying CEO Maurice Levy will stand down once it’s 2016 accounts are approved. Kevin Roberts, a member of the management board, is also leaving his post. The French advertising company in July reported sales that missed analysts’ estimates, while its former intended merger partner Omnicom Group Inc. had the fastest growth in more than two years.

To contact the reporter on this story: Namitha Jagadeesh in London at [email protected]

To contact the editors responsible for this story: Cecile Vannucci at [email protected] Alan Soughley

 

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