European stocks dropped to their lowest level in more than three months as concern mounted about a buildup of Russian troops along the border with Ukraine, and a report showed German factory orders unexpectedly fell.
Iliad SA plunged 5.7 percent after people familiar with the matter said T-Mobile US Inc. plans to reject the French company’s $15 billion bid to buy a controlling stake. Deutsche Telekom AG, which owns the U.S. mobile-phone operator, lost 2.8 percent. Swiss Re AG (SREN) slipped 3 percent after posting second-quarter profit that fell short of analysts’ estimates.
The Stoxx Europe 600 Index dropped 0.9 percent to 329.21 at the close of trading, paring the gauge’s advance this year to 0.3 percent. National benchmark indexes declined in all 18 western-European markets today. Germany’s DAX and the U.K.’s FTSE 100 both retreated 0.7 percent, while France’s CAC 40 decreased 0.6 percent. Portugal’s PSI 20 Index slid 4.1 percent.
“People are taking risk off as they go on holiday, bearing in mind we’ve got big geopolitical events going on in the background,” Kevin Lilley, who helps manage 17 billion pounds ($29 billion) as head of European equities at Old Mutual Global Investors U.K. Ltd., said by telephone from London.
A Snapshot of Ukraine's Past and Future
European equities climbed 0.3 percent yesterday, rebounding from four days of losses, as companies including Credit Agricole SA and Deutsche Post AG reported better-than-expected earnings.
The region’s stocks slid today amid increasing concern that Russia may invade Ukraine. NATO’s deputy secretary general said yesterday that about 20,000 Russian troops have amassed along the border with eastern Ukraine. A Pentagon spokesman said the Kremlin has positioned its forces closer to Ukrainian territory than it did in the spring when it annexed Crimea.
“What matters is that they continue to reinforce these units, that they are very capable and very ready across what we call combined arms capabilities -- armor, artillery, air defense, special forces -- and that they are closer to the border than they were in the spring,” Rear Admiral John Kirby told reporters.
A report from the German Federal Statistics Office showed that factory orders declined 3.2 percent in June, the biggest contraction in activity since September 2011. Economists had predicted they would climb 0.9 percent, according to the median estimate in a Bloomberg survey.
Iliad sank 5.7 percent to 178.20 euros as a person said the French mobile-phone operator is seeking partners to help it buy a larger stake in T-Mobile US. Deutsche Telekom, which owns about 66 percent of T-Mobile according to Bloomberg data, declined 2.8 percent to 11.54 euros.
Swiss Re slid 3 percent to 74.80 Swiss francs. The world’s second-biggest reinsurer reported quarterly net income of $802 million, missing the $898 million average analyst estimate. Profit from life and health reinsurance declined.
Hannover Re lost 3.5 percent to 61.09 euros, its lowest price in more than four months. The German reinsurer posted a second-quarter operating profit of 334.1 million euros ($446 million), trailing the average projection of 347.5 million euros. The company said its North American business generated smaller premiums.
Italy’s FTSE MIB Index dropped 2.7 percent, extending its losses after a government report showed the economy fell into a recession in the first half of this year. Gross domestic product unexpectedly contracted 0.2 percent in the second quarter. Economists surveyed by Bloomberg had predicted the economy would expand 0.1 percent.
Banca Popolare di Milano Scarl slumped 8.3 percent to 57.5 euro cents for the biggest decline on the FTSE MIB. (FTSEMIB) Banca Monte dei Paschi di Siena SpA retreated 5.9 percent to 1.19 euros.
Fiat SpA plunged 5.6 percent to 6.47 euros. The proportion of the carmaker’s shares out on loan has reached 9.6 percent, according to Markit, the highest in a year.
Ageas climbed 3 percent to 26.64 euros. The Belgian insurer agreed to sell Ageas Protect Ltd., which offers critical-illness and income-protection policies in the U.K., to American International Group Inc. for 181 million pounds.
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