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Europe: Stocks decline as Germany's DAX index enters correction
[LONDON] European stocks fell for a fifth day, the longest streak this year, with Germany's benchmark index retreating 10 per cent from its April peak.
The Stoxx Europe 600 Index lost 0.9 per cent to 385.68 at 4:31 pm in London. Germany's DAX Index dropped 1 per cent, even as Deutsche Bank AG rose 3.9 per cent after saying John Cryan will replace co-Chief Executive Officer Anshu Jain. Cryan will become sole CEO when Juergen Fitschen steps down next May.
"All the positive momentum factors that had driven markets are either gone or priced in," said Hendrik Koenig, an equity strategist at B Metzler Seel Sohn & Co in Frankfurt.
"We anticipated a correction, and the one for German stocks was definitely overdue. There could be some further downside risk here, especially if we have external shocks from the Greek situation or further strengthening of the euro."
Continental AG and BMW AG led the DAX decline. Portugal's PSI 20 Index fell 2.4 per cent. Greece's ASE Index dropped 2.7 per cent, the most among western-European markets and reversing an earlier gain of as much as 1.2 per cent. German Chancellor Angela Merkel demanded urgent action from the Greek government to cement its position as a member of the single currency.
The Stoxx 600 slipped more than 6 per cent from its April record through Friday amid an increased focus on Greece. It posted its first back-to-back weekly declines since the start of the year.
Automakers fell the most among Stoxx 600 industry groups as the euro climbed for the first time in three days. Commodity producers dropped as data showed China's imports slumped. Food- and-beverage companies posted the only gain, with Diageo Plc jumping 7.2 per cent after a report that Brazilian billionaire Jorge Paulo Lemann is considering a takeover bid.
Novo Nordisk A/S slid 2.4 per cent. A Baader-Helvea note showed Eli Lilly & Co's Trulicity has been stronger than Novo's Victoza in lowering blood glucose levels, and the difference became statistically significant in a Japanese study.
Actelion Ltd jumped 6.1 per cent after the Sunday Times said Shire Plc approached it for a merger in recent weeks. Shire dropped 2.6 per cent.