“European stocks declined for a fourth day, the longest losing streak in three months, with a gauge of commodity producers sinking to an 18-month low. U.S. index futures dropped, while Asian shares climbed.
BHP Billiton Ltd. (BHP) retreated to a seven-month low after the world’s largest mining company said third-quarter iron ore production rose less than expected. Tesco Plc (TSCO) sank 3.3 percent after reporting the first annual profit drop in almost 20 years and saying it will exit the U.S. ASML Holding NV rose the most since July after posting first-quarter sales that topped analysts’ estimates and announcing a share buyback program.
The Stoxx Europe 600 Index (SXXP) fell 0.9 percent to 285.63 at 11:26 a.m. in London. The gauge earlier slid as much as 1.4 percent amid speculation Germany’s credit rating could be downgraded, before recovering some of the losses within 15 minutes. Some 14,000 DAX Index futures contracts expiring in June changed hands in a five-minute period about 9:50 a.m. inFrankfurt today, more than 15 times the 20-day average volume for that time of day, according to data compiled by Bloomberg.
“Investors are worried that Germany’s economy isn’t holding up so strongly anymore, and German downgrade rumors are spreading more fear in the markets today,” said John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP in Geneva. “Coupled with the disappointing Chinese GDP numbers from earlier this week and the plunging gold prices, we’re in the middle of a phase of uncertainty and possibly a correction — the last thing market participants want to hear in such a period are downgrade rumors.”
The Stoxx 600 has still gained 2.1 percent this year as U.S. lawmakers agreed on a compromise budget and central banks maintained stimulus measures. Futures contracts on the Standard & Poor’s 500 Index lost 0.5 percent today, while the MSCI Asia Pacific Index rose 0.7 percent.
China, Commodities
“In the shorter term, we have seen a bit of nervousness linked to the poor figures out of China and the selloff in commodities — and we’re seeing mining stocks also weighing today,” said Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie. in Neuchatel, Switzerland, who helps manage $1.4 billion in equities…..”
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