European Stocks Drop as Investors Assess Growth on Falling Oil

European stocks declined as investors assessed global growth prospects and valuations amid a retreat in oil prices.

Miners posted the worst performance of the 19 industry groups on the Stoxx Europe 600 Index, with Glencore Plc and BHP Billiton Ltd. losing at least 4.8 percent. Total SA and Royal Dutch Shell Plc led a gauge of energy-related companies lower as oil slid after after Iran branded a proposal by Saudi Arabia and Russia for producers to freeze output as “ridiculous.” PSA Peugeot Citroen rose 4 percent after saying it’ll issue new growth targets this year after it completed a restructuring program ahead of schedule.

The Stoxx 600 slipped 0.7 percent to 325.45 at 8:13 a.m. in London. The equity gauge slid 1.2 percent yesterday, tracking oil lower in volatile trading, amid concern over China’s slowdown, disappointing earnings results and dissipating faith in central bank support. It hasn’t posted two consecutive days of gains since December.

Equities are still 7.2 percent ahead of a two-year low hit earlier this month, buoyed by gains in miners. The stuttering rebound has taken the Stoxx 600’s valuation to about 14.5 times estimated earnings, up from this year’s low of 13.2, though it’s still well below the 16.7 reached at the April peak.

Among other stocks moving on corporate news, Fresenius SE gained 4.4 percent after Europe’s largest health-care provider forecast profit to rise as much as 12 percent and sales to increase as much as 8 percent in 2016.

Source: Bloomberg

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European Shares Decline as Investors Assess Earnings, Valuations

European shares dropped as investors assessed earnings reports and equity valuations, while oil retreated.

The Stoxx Europe 600 Index fell 0.2 percent to 328.06 at 8:27 a.m. in London. The equity gauge is heading for a 4.1 percent weekly decline. It is trading at about 14.4 times estimated earnings, almost 10 percent below the valuation for the Standard & Poor’s 500 Index.

Amid volatile trading, the European equity benchmark closed down yesterday as sliding automakers and Credit Suisse Group AG outweighed gains in commodity producers. A gauge tracking equity swings has jumped 34 percent this year as the Stoxx 600 has lost almost 10 percent, with concern about bad loans at banks adding to worries about an oil rout and China’s economy.

Investors will look to a U.S. report on January employment today for indications of the sturdiness of the American economy and the trajectory of interest rates in the wake of the turmoil. Economists forecast a 190,000 gain in nonfarm payrolls with unemployment holding at 5 percent.

Source: Bloomberg

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