European Central Bank
European stocks dropped from a 12- week high as investors waited to discover how the euro area plans to fund its enlarged bailout facility.
Petroleum Geo-Services ASA (PGS) fell 13 percent, leading a slide among oil and gas companies, after reporting earnings that missed estimates. Wacker Chemie AG (WCH) slipped 6.8 percent as the German chemicals company reported third-quarter earnings and sales that trailed analysts’ estimates, according to Bloomberg report.
The Stoxx Europe 600 Index retreated 0.3 percent to 248.58 at 2:19 p.m. in London. The gauge surged 3.6 percent yesterday after the region’s leaders said they will boost their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a bid to stem the debt crisis.
The Stoxx 600 is headed for a weekly gain of 4.1 percent, its biggest rally this month.
“The situation is not resolved,” said Monika Rosen, the head of global research at UniCredit SpA in Vienna. There is a need for “political consensus between all these euro nations. That is the difficulty we are trying to solve. It’s a consensus- building process that makes it slow and unclear. Markets are still skeptical.” She spoke in a Bloomberg Radio interview with Ken Prewitt.
National benchmark indexes declined in 14 of the 17 western-European markets that are open today. The U.K.’s FTSE 100 Index slid 0.3 percent and France’s CAC 40 Index retreated 0.6 percent. Germany’s DAX Index slipped 0.2 percent.
The Stoxx 600 has fallen 9.9 percent this year amid concern that the euro area’s sovereign debt crisis will hamper growth.
The gauge is trading at 10.8 times the estimated earnings of its companies, compared with the average multiple of 12 during the past five years, according to data compiled by Bloomberg. Half of the 140 companies in the Stoxx 600 that have released earnings since Oct. 11 beat analysts’ profit estimates, according to data compiled by Bloomberg.
Petroleum Geo-Services fell 13 percent to 61.90 kroner, the biggest slide on the Stoxx 600, after reporting third-quarter net income of $13.4 million, compared with a loss of $40.4 million a year earlier. That missed the $32.6 million average of analysts’ estimates compiled by Bloomberg.
Wacker Chemie sank 6.8 percent to 78.53 euros. The Munich- based chemicals company reported third-quarter sales that trailed analysts’ estimates and forecast lower revenue in the fourth quarter.