By Adam Haigh
Oct. 31 (Bloomberg) -- Stocks fell in Europe and Asia, extending the MSCI World Index's worst monthly slump on record, as concern deepened the economic slowdown will stifle profit growth. U.S. index futures retreated before a report that will probably show consumer spending dropped.
L'Oreal SA lost 11 percent after the world's biggest cosmetics company reduced its profit forecast as consumers cut spending. BT Group Plc, the U.K.'s largest phone company, tumbled 18 percent after saying second-quarter earnings missed its targets amid the economic slowdown. BHP Billiton Ltd., the biggest mining company, dropped 4 percent as copper retreated.
The MSCI World Index lost 1.1 percent to 941.65 at 8:10 a.m. in London as all 10 industry groups decreased. Europe's Dow Jones Stoxx 600 Index declined 0.9 percent, while the MSCI Asia Pacific Index retreated 2.1 percent.
Standard & Poor's 500 Index futures expiring in December slipped 1.9 percent. Spending by U.S. consumers probably fell in September, capping its weakest quarter in three decades, economists said before today's Commerce Department report.
Asian stocks fell, adding to the regional benchmark index's worst month ever, as a record three-day rally fizzled after companies slashed profit forecasts and metals prices tumbled. The MSCI Asia Pacific Index retreated 2.1 percent.
``Sentiment is very fragile,'' said Matt Buckland, a trader at CMC Markets in London. ``There may be a little further to go down for equity markets.''
Worst Month
The MSCI World has slumped 20 percent this month, heading for the worst monthly decline since records began in 1970. Central banks from Washington to Hong Kong have slashed interest rates in a bid to contain the economic slump and the worst financial crisis since the Great Depression. More than $9.5 trillion has been erased from the value of stocks worldwide this month.
Europe's Stoxx 600 has dropped 16 percent this month, the most since the October 1987 crash when it fell 24 percent.
U.K. consumer confidence slumped in October close to the weakest level since at least 1974 as the financial crisis spooked British shoppers, GfK NOP said.
Retail sales in Germany, Europe's largest economy, fell more than economists expected in September as the financial crisis discouraged people from spending.
L'Oreal sank 11 percent to 53.89 euros. The cosmetics maker cut sales and profit forecasts for the third time in less than four months. Third-quarter sales increased 3.4 percent to 4.27 billion euros ($5.5 billion), missing the 4.36 billion-euro median estimate of nine analysts surveyed by Bloomberg News.
BT, BHP
BT Group slumped 18 percent to 116.5 pence. Second-quarter earnings missed its targets amid the economic slowdown. Earnings before interest, taxes, depreciation and amortization as well as earnings per share were ``slightly below expectations'' in the three months through September, the company said.
BHP declined 4 percent to 967.5 pence. Copper fell 4 percent to $4,035 in London, headed for its worst month since at least 1986, amid signs the global financial crisis is curbing demand for raw materials.
Akzo Nobel NV, the biggest maker of coatings and paints, slipped 3.6 percent to 29.88 euros. Credit Suisse Group AG cut its recommendation on the shares to ``underperform'' from ``neutral.'' The outlook has ``become worse'' since the company reported earnings, London-based analyst Rhian Tucker wrote in a note to clients today.
Earnings for the 712 companies in western Europe that reported results since Oct. 7 declined 3.9 percent on average, trailing analysts' expectations 2.2 percent, according to data compiled by Bloomberg.
Sanofi-Aventis
Sanofi-Aventis SA rose 1.9 percent to 48.055 euros after France's largest drugmaker raised its forecast for a second time this year and reported third-quarter profit that beat analyst estimates. Net income excluding some items was 1.92 billion euros ($2.46 billion), or 1.47 euros a share, beating the median 1.41-euro estimate of five analysts surveyed by Bloomberg.
Analysts have cut profit forecasts this year as the credit turmoil spread and threatened economic growth. Earnings for companies in the Stoxx 600 will decline 4.4 percent in 2008, down from 11 percent growth predicted the start of the year, according to estimates compiled by Bloomberg.
The Bank of Japan today joined central banks from Washington to Hong Kong by cutting its benchmark interest rate to 0.3 percent in a split decision to stem damage on the economy from the global financial crisis.
Barclays Plc climbed 5.7 percent to 217 pence after the U.K.'s second largest bank said it will raise up to 7.3 billion pounds ($11.8 billion) in a share sale to an investor group, including Abu Dhabi and Qatar, as it seeks to meet new U.K. cash-reserve targets without using the government's bailout fund.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
Posts
No comments:
Post a Comment