Sun, Jun 15, 2014 - Page 15 News List

European stocks fall on concern over oil supply, UK builders

RISING RISKS:The STOXX 600 snapped an eight-week rally on fears of rising violence in Iraq, declining US retail sales and UK borrowing limits

Bloomberg

European stocks fell as escalating violence in Iraq threatened oil supplies and UK property companies declined.

Barratt Developments PLC and British Land Co slid more than 4 percent as British Chancellor of the Exchequer George Osborne pledged to increase the Bank of England’s power to restrict borrowing. Total SA rose as a gauge of oil-related stocks posted the best performance on the STOXX Europe 600 Index. Geberit AG gained 1.7 percent after Goldman Sachs Group Inc raised its rating on the maker of toilets and bathroom piping.

END OF RALLY

The STOXX 600 retreated 0.2 percent to 347.07 at the close of trading, after earlier losing as much as 0.9 percent. The equity gauge fell 0.1 percent this week, snapping an eight-week rally. The measure closed little changed on Friday, as US retail sales grew slower than estimated and more Americans than forecast applied for unemployment benefits.

“The developments in Iraq will continue to be on investors’ radars as a spike in oil prices always holds the potential to spook market participants,” said Mark Andersen, co-head of global asset allocation at UBS AG’s wealth-management unit in Hong Kong.

Escalating violence in Iraq has stoked concern about further supply disruptions for OPEC’s second-biggest oil producer. Militants calling themselves the Islamic State in Iraq and the Levant were heading toward Baghdad after seizing several cities in the country. US President Barack Obama said he would not rule out using airstrikes to help the Iraqi government.

LOW US CONFIDENCE

In the US, a report showed that consumer confidence unexpectedly declined this month. The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 81.2 from 81.9 in May. The median projection in a Bloomberg survey of economists called for 83.

National benchmark indices fell in 14 of the 18 markets in western Europe. Germany’s DAX slid 0.3 percent, France’s CAC 40 lost 0.2 percent and the UK’s FTSE 100 dropped 1 percent.

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