Stocks fell in Europe on concern more banks will increase capital and dropped in Japan as investors gauged the impact of the nuclear crisis on economic growth. The euro strengthened amid speculation interest rates will rise, while commodities declined for a third day.
The Stoxx Europe 600 Index retreated 0.6 percent at 10:35 a.m. in London, and Japan’s Topix lost 0.9 percent. Standard & Poor’s 500 Index futures gained 0.1 percent. The euro appreciated 0.3 percent against the dollar. The S&P GSCI index of 24 raw materials sank 0.3 percent as crude oil slipped 0.5 percent. Wheat advanced 0.9 percent.
Unione di Banche Italiane ScpA, Italy’s fourth-biggest bank, said it plans to sell shares to strengthen capital. Goldman Sachs Group Inc. almost halved its 2011 forecast for Japan’s economic growth after the March 11 earthquake led to radiation leaks at the Fukushima Dai-Ichi plant. European Central Bank President Jean-Claude Trichet said yesterday inflation rates that stick above 2 percent would be a concern.
“The European banking sector still needs capital and this process isn’t finished,” said Philippe Gijsels, the Brussels- based head of research at BNP Paribas Fortis Global Markets. “There have also been some disappointing figures on the U.S. economy recently and the whole recovery remains weak.”
UBI, Tepco
Three stocks fell for every two that rose in Europe’s Stoxx 600. UBI tumbled 8.7 percent, the most in two years. Commerzbank AG, Germany’s second-largest lender, slid 3.3 percent.
Tokyo Electric Power Co., which operates the crippled Fukushima Dai-Ichi power station, tumbled 19 percent. Kandenko Co., the engineering company affiliated with the utility, dropped 4.8 percent. Japan’s gross domestic product will rise 0.7 percent in the 2011 fiscal year, less than the previous expectation of 1.3 percent, Goldman Sachs said in a report.
The gain in U.S. futures indicated the S&P 500 may rebound from yesterday’s decline. An index of U.S. consumer confidence probably fell to 65 in March from 70.4 in February, according to the median estimate of 68 economists surveyed by Bloomberg News. The Conference Board’s report is due at 10 a.m. New York time. Other data may show U.S. residential real-estate prices dropped in January by the most in more than a year. The S&P/Case-Shiller index of property values is due at 9 a.m. in New York.
The yield on the 10-year U.S. Treasury note rose one basis point to 3.45 percent. The five-year yield also climbed one basis point, to 2.19 percent, before the government sells $35 billion of the securities.
Euro, Dollar
The euro appreciated 0.4 percent versus the yen, strengthening against all but two of its most-actively traded counterparts. The Dollar Index, which tracks the U.S. currency against those of six trading partners, declined 0.3 percent, falling for the second day. The yen depreciated against all 16 of its most-traded peers.
Crude oil dropped for a fourth day, trading at $103.44 a barrel in New York as Libyan rebels made gains against forces loyal to Muammar Qaddafi’s troops. Copper declined 0.4 percent in London.
The MSCI Emerging Markets Index rose 0.2 percent. India’s Bombay Stock Exchange Sensitive Index advanced for a sixth day, climbing 1.1 percent. The Dubai Financial Market General Index climbed 0.7 percent to the highest level since Feb. 16 after Emaar Properties PJSC, builder of the world’s tallest tower, unexpectedly approved a 10 percent cash dividend.
