“European stocks declined, erasing an earlier advance, as Spanish and Italian lenders retreated with the nations’ government bonds amid signs of political turmoil. U.S. index futures fell while Asian shares advanced.
Banco Santander SA, Spain’s largest bank, dropped 2.9 percent as Prime Minister Mariano Rajoy denied corruption allegations. UniCredit SpA, the biggest lender in Italy, sank 4.4 percent as former premier Silvio Berlusconi gained in opinion polls before elections this month. Julius Baer Group Ltd. (BAER) fell 3.1 percent after the wealth manager reported declining revenue margins. Swatch Group AG rose 2.8 percent as profit topped estimates.
The Stoxx Europe 600 Index (SXXP) retreated 0.4 percent to 287.07 at 12:14 p.m. in London after earlier climbing as much as 0.2 percent. The gauge has still increased 2.6 percent this year as U.S. lawmakers agreed to a compromise budget to prevent automatic spending cuts and tax increases that threatened to push the world’s largest economy into a recession.
“Spanish yields have blown up in the past hour to their highest levels since December as concerns about the Spanish government mount,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “In addition to the growing corruption scandal in Spanish politics, the Italian elections towards the end of the month are also a concern.”
The volume of shares changing hands in Stoxx 600 companies was 9.6 percent lower than the 30-day average, according to data compiled by Bloomberg. The gauge is trading at 12.3 times its companies’ estimated earnings, compared with a valuation of 9.75 times profit in June, data shows….”
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