European Stocks Fall After Two-Day Rally; H&M, RBS Drop
European shares fell, halting a two-day rally, on concern that the crisis in Ukraine may escalate. U.S. stock-index futures and Asian shares rose.
Hennes & Mauritz AB fell 2.9 percent after reporting quarterly profit that missed analysts’ estimates. Royal Bank of Scotland Group Plc and Banco Santander SA declined after their U.S. units failed the Federal Reserve’s stress test. United Internet AG added 4.3 percent after saying that profit jumped 25 percent last year.
The Stoxx Europe 600 Index lost 0.2 percent to 330.24 at 8:16 a.m. in London. Standard & Poor’s 500 Index futures rose 0.2 percent, and the MSCI Asia Pacific Index added 0.4 percent.
Stocks in the U.S. fell yesterday after President Barack Obama said in Brussels the U.S. and its European allies stand united against Russian attempts to redraw Ukraine’s boundaries, while warning that indifference would ignore the lessons from two world wars.
The U.S. and European Union have imposed financial sanctions on Russian and Ukrainian officials as well associates of Russian President Vladimir Putin, leaving open the threat of broader sanctions targeting the Russian economy, including its energy and financial sectors.
A Commerce Department report at 8:30 a.m. in Washington may show a final reading of U.S. gross domestic product increased at a 2.7 percent annualized rate from October through December. Separate data may show initial jobless claims rose to 323,000 in the week ended March 22 from 320,000 the prior period.
Monthly Loss
The Stoxx 600 rallied 2 percent in the past two days, the most in three weeks. The measure is heading for its biggest monthly decline since June, falling 2.1 percent.
H&M declined 2.9 percent to 281.40 kronor. Europe’s second-biggest clothing retailer said net income rose 7.8 percent to 2.65 billion kronor ($410 million) in the first quarter, falling short of the 2.89-billion kronor estimated by analysts. The gross margin narrowed to 54.9 percent from 55.2 percent a year earlier, missing projections.
RBS, Britian’s biggest state-owned lender, lost 1.7 percent to 300.9 pence, while Spain’s Santander declined 0.9 percent to 6.59 euros. The Fed failed their U.S. subsidiaries, citing flaws in the quality of their capital planning.
Babcock International Group Plc fell 2.9 percent to 1,326 pence. The engineering-services company agreed to buy private equity-owned Avincis for 920 million pounds ($1.52 billion) to expand in helicopter servicing. Under the terms of the deal, Babcock will absorb 705 million pounds of Avincis debt and carry out a rights offering to help fund the acquisition.
United Internet advanced 4.3 percent to 33.56 euros. The German provider of phone and Internet services said earnings before interest, taxes, depreciation and amortization climbed 25 percent to 407 million euros ($561 million) last year. Sales rose 11 percent to 2.66 billion euros.
Raiffeisen Bank International AG rose 1.7 percent to 23.50 euros. The Austrian bank said fourth-quarter net income climbed to 146 million euros from a loss a year earlier, surpassing the 102 million euros that analysts had projected. The company that makes most of its profit in the former Soviet Union said this year’s results may suffer from the Ukraine crisis.
(By Inyoung Hwang)
Source: bloomberg
