Europe Stocks Fall With Russia, Commodites; Rupiah Gains 

Europe Stocks fall

European stocks fell and Russian equities declined for a sixth day amid mounting international condemnation of President Vladimir Putin after the downing of a passenger jet in Ukraine. Commodities dropped to the lowest since February and Indonesia’s rupiah strengthened.

The Stoxx Europe 600 Index (BCOM) slipped 0.4 percent by 10:05 a.m. in London. Futures on the Standard & Poor’s 500 Index (SPX) dropped 0.2 percent while the dollar weakened against most peers. Russian stocks headed for the longest slump since January and its bonds declined. Indonesia’s currency added 0.4 percent versus the dollar. The Bloomberg Commodity Index of 22 raw materials dropped 0.3 percent, and U.K. natural gas fell 0.9 percent.

European Union foreign ministers meeting in Brussels tomorrow will consider tougher sanctions on Russian individuals and companies as world leaders pressure Putin to do more to end the violence which led to the deaths of 298 people on Malaysian Airlines flight MH17. Halliburton Co. and Netflix Inc. are among companies reporting today, while Internet bellwether Facebook Inc. releases earnings later in the week.

“More and more pressure on Russia is likely to see higher volatility in European trading,” said Evan Lucas, markets strategist at IG Ltd. in Melbourne. “Datawise it’s a very, very quiet week, so all leads will probably come from the U.S. Earnings from Facebook and Netflix, while not huge movers in terms of the overall market, will be a good way of seeing how investors still view risk.”

Europe Equities

The Stoxx 600 dropped today after last week’s 0.8 percent gain. Travel and leisure stocks were some of the biggest losers among 19 industry groups in the gauge today, while the volume of shares listed on the Stoxx 600 changing hands was 32 percent lower than the 30-day average, data compiled by Bloomberg show.

Air France-KLM Group (AF), Europe’s biggest airline, declined 3.1 percent as tour operator TUI AG fell 2.5 percent and hotelier Accor SA retreated 1.8 percent.

Julius Baer Group Ltd. jumped 5.8 percent after Switzerland’s third-largest wealth manager said first-half profit rose 56 percent and announced an agreement to purchase European operations from Bank Leumi Le-Israel BM.

Sky Deutschland AG (SKYD) rallied 3.1 percent after people familiar with the matter said Rupert Murdoch’s 21st Century Fox Inc. may sell its 57 percent stake in the broadcaster to British Sky Broadcasting Group Plc in the next two weeks. BSkyB fell 1.5 percent.

Russia’s Micex Index (INDEXCF) of stocks slid 1.5 percent to a two-month low. The nation’s February 2027 ruble bonds declined, lifting the yield 10 basis points to 9.14 percent, the highest since May 7. The ruble advanced 0.1 percent against the dollar.

Putin Comments

EU ministers meeting tomorrow will consider blacklisting more associates of Putin and, for the first time, Russian companies accused of profiting from Ukraine’s woes. Putin said the airliner disaster shouldn’t be used for political purposes.

Putin again blamed the downing of the plane on the Ukraine conflict and said that international investigators, whose probe of the crash site has been hampered by armed, pro-Russian separatists, should have full access to the wreckage. Russia will “do everything it can” to seek a negotiated settlement of the Ukraine conflict, he said in video posted on the Kremlin’s website.

Futures on the S&P 500 expiring in September dropped today after the index advanced 0.5 percent last week. It closed 0.4 percent away from the record reached this month.

Earnings Season

Halliburton, Netflix and Chipotle Mexican Grill Inc. are among S&P 500 companies reporting earnings today. About 77 percent of those that have posted results this earnings season have beaten analysts’ estimate for profit, while 70 percent exceeded sales projections, according to data compiled by Bloomberg.

Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

The MSCI All-Country World Index slipped less than 0.1 percent today following last week’s 0.5 percent increase. The MSCI AC Asia Pacific Index (MXAP) gained 0.1 percent after rising 0.5 percent last week.

The Hang Seng Index lost 0.3 percent while a gauge of Chinese companies in the city retreated 0.4 percent. The Shanghai Composite Index dropped 0.2 percent. Eleven companies will start to sell new shares this week. That may freeze subscription funds of about as much as 766.5 billion yuan ($124 billion), according to the Securities Daily.

Rupiah Rises

The Jakarta Composite Index added 0.7 percent on speculation results will confirm Joko Widodo as Indonesia’s next president. The election commission is set to release the results by tomorrow.

The Bloomberg Commodity Index fell as much as 0.4 percent to the lowest since Feb. 11. U.K. natural gas retreated after declining 4 percent on July 18, according to broker data on Bloomberg. Gold climbed 0.3 percent. U.S. corn slipped as much as 1.5 percent to the lowest since July 2010.

West Texas Intermediate crude oil slipped 0.2 percent to $102.90 a barrel and Brent crude slid 0.2 percent to $107.01.

Government bonds and the largest currency markets were little changed, with the yield on 10-year Treasury notes at 2.48 percent and the euro trading at $1.3527. South Korea’s won rose the most and the Norwegian krone fell by the greatest amount against the dollar among its 16 major peers.

Reporters: Nick Gentle in Hong Kong, Andrew Reierson in London

Source: Bloomberg

 

 

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