Most European Stocks Drop While Dollar Weakens

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By Abigail Moses and Nick Gentle

Most European stocks fell as a measure of German business confidence dropped and the dollar weakened from a four-year high. China led gains in emerging markets, while the ruble strengthened.

The Stoxx Europe 600 Index slid 0.1 percent and Standard & Poor’s 500 Index futures rose 0.1 percent at 9:55 a.m. in London. The Bloomberg Dollar Spot Index ended a three-day advance as Greek bonds fell for a third day. The Shanghai Composite Index climbed to the highest level since March 2013. Russia’s currency gained the most in almost three weeks and cotton dropped to a five-year low.

Confidence among German executives fell for a fifth month, with the Ifo institute’s business climate index dropping to 104.7 in September from 106.3 in August. The dollar declined before a report that’s forecast to show U.S. home sales jumped last month. The U.K. Parliament may be recalled to seek approval for joining U.S. air strikes on Islamic State, the opposition Labour Party leader Ed Miliband said.

“The macro data in Europe is not as good as expected,” said Michael Kapler, a money manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “Expectations for growth can change quite quickly and as investors unwind their risk bets, this can be a painful period for the market.”

The Stoxx 600 dropped after sliding the most since July 8 yesterday. Automakers and banks posted the biggest declines among 19 industry groups today.

TNT Express

TNT Express NV sank 11 percent after lowering its 2015 profit forecast. PostNL NV, which owns a 15 percent stake in the Dutch package-delivery company, lost 3.2 percent. Adecco SA slid 4.4 percent after the provider of temporary workers said Germany and France had weaker growth than normal this month.

Merck KGaA gained 2.6 percent after Commerzbank AG recommended buying shares of the drug and chemicals company.

The volume of Stoxx 600 shares changing hands today was 39 percent greater than the 30-day average, according to data compiled by Bloomberg.

Futures (SPX) on the S&P 500 expiring in December were little changed after the index declined for three straight days, closing at its lowest level since Aug. 19.

The MSCI All-Country World Index slipped 0.1 percent, a fourth daily drop. The gauge closed at its lowest level since Aug. 12 yesterday. The MSCI AC Asia Pacific Index (MXAP) was little changed after closing at its lowest level since June 5.

In the U.S., a Commerce Department report at 10 a.m. in Washington will probably show new-home sales rebounded in August following two months of declines, economists forecast.

Dollar Weakens

The dollar weakened against most of its 16 major peers, with the greatest losses coming against its Australian counterpart. The Bloomberg Dollar Spot Index slipped 0.1 percent after reaching the highest level since 2010 yesterday, and the U.S. currency slipped 0.3 percent to 108.56 yen.

The yen gained 0.2 percent to 108.63 a dollar, and the ruble climbed 0.8 percent.

Treasury 10-year notes were little changed after rising the past four days, with the yield at 2.54 percent. The U.S. will auction $35 billion of five-year notes today.

Greece’s 10-year bond yield rose 13 basis points to 6.19 percent, reaching the highest since Aug. 14. The securities dropped yesterday on concern the nation’s proposal to exit its international bailout agreement early would allow the country to backslide on measures to control its debt and deficit.

Cotton Falls

Cotton fell as much as 2.4 percent to the lowest price since Oct. 6, 2009. China, the biggest buyer of the fiber, will restrict imports next year to encourage use of domestic cotton, the government said on Sept. 22. Gold rose 0.2 percent to $1,224.10 an ounce, the third consecutive advance, and copper fell 0.1 percent to $6,713.50 a metric ton, the sixth consecutive decline. Germany is the third-biggest copper consumer.

The MSCI Emerging Markets Index added 0.2 percent, rebounding from a three-month low.

The Shanghai Composite Index rose 1.5 percent as a jump in new trading accounts lifted brokerages. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong rallied 1.4 percent, rebounding from a two-month low. Investors opened about 217,000 accounts last week, the most in two years, amid speculation an exchange link with Hong Kong and government stimulus will boost stocks, according to data from the China Securities Depository and Clearing.

Russian Stocks

Russia’s Micex (INDEXCF) added 0.7 percent. AFK Sistema and OAO Bashneft gained as a Moscow City Court is set to hear an appeal of billionaire Vladimir Evtushenkov’s house arrest.

The ruble strengthened 0.7 percent against the dollar. The government is scheduled to hold its first local debt auction in 10 weeks.

Markets in the Middle East mostly declined. Dubai’s DFM General Index dropped 1.2 percent, the most since Sept. 11, while Abu Dhabi’s ADX General Index (ADSMI) slipped 0.3 percent, its fourth day retreating. Saudi Arabia’s Tadawul All Share Index slid 1.4 percent, on course for the lowest close in a month, while benchmark indexes in Kuwait and Qatar decreased 0.1 percent. Egypt’s EGX 30 Index dropped 0.1 percent. Israel’s market is closed for a public holiday.

The Borsa Istanbul 100 Index in Turkey rose for the first time in five days, climbing 0.3 percent.

To contact the reporters on this story: Nick Gentle in Hong Kong at [email protected]; Abigail Moses in London at [email protected]

To contact the editors responsible for this story: Nick Gentle at [email protected]; Stuart Wallace at [email protected] Michael Shanahan, Stuart Wallace

 

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