European Stocks Decline as Alstom, HSBC Retreat; Cadbury Gains

By Adam Haigh

Jan. 19 (Bloomberg) -- European stocks declined as a report showed investor confidence in the region’s biggest economy fell for a fourth month and sales at Alstom SA missed estimates. Asian shares dropped, while U.S. futures were little changed.

Alstom, the world’s second-largest train maker, sank 3.8 percent. Casino Guichard-Perrachon SA lost 1.4 percent after reporting fourth-quarter revenue that also trailed analysts’ forecasts. HSBC Holdings Plc paced a retreat among banks after Exane BNP Paribas recommended selling the shares. Cadbury Plc jumped 3.7 percent as its board agreed on an 11.9 billion-pound ($19.7 billion) takeover offer from Kraft Foods Inc.

Europe’s Dow Jones Stoxx 600 Index slipped 0.7 percent to 256.46 as of 11:27 a.m. in London. The regional benchmark gauge has climbed 63 percent since March 9, boosted by record-low interest rates in the U.S. and Europe and about $12 trillion committed by governments worldwide to revive the economy. The rally has slowed in 2010 as the measure posted its first weekly decline in a month.

“There’s been a nervousness this year in terms of investors trying to understand when and how central banks will exit the stimulus process,” said Gregor Smith, a fund manager at Daiwa Asset Management in London who helps oversee about $1 billion. “A few people have just decided this is as good as it gets for the rally and are taking some profits.”

Germany’s ZEW Center for European Economic Research index of investor and analyst expectations, which aims to predict developments six months ahead, declined to 47.2 in January from 50.4 in the previous month. This was lower than the drop to 50 that the median forecast of 37 economists had predicted in a Bloomberg News survey.

U.S., Asia

Standard & Poor’s 500 Index futures expiring in March slipped 0.2 percent ahead of trading in the U.S., where markets were closed yesterday. Citigroup Inc. and International Business Machines Corp. are among companies scheduled to report results today. Analysts estimate fourth-quarter profits in the S&P 500 grew 67 percent on average, data compiled by Bloomberg show.

The MSCI Asia Pacific Index lost 0.6 percent today. Japan Airlines Corp., Asia’s biggest carrier, said it’s filing for bankruptcy, according to the government’s chief spokesman.

Alstom tumbled 3.8 percent to 52.04 euros. Sales in the fiscal third quarter rose to 4.69 billion euros ($6.75 billion) from 4.56 billion euros a year earlier. That trailed the average estimate of 4.81 billion euros in a Bloomberg survey of seven analysts.

Casino, HSBC

Casino slid 1.4 percent to 61.15 euros after saying revenue from continued operations in the three months ended Dec. 31 rose to 7.32 billion euros from 7.17 billion euros a year earlier. That missed the 7.36 billion-euro estimate from eight analysts surveyed by Bloomberg.

Banks were the worst performers among 19 industry groups in the Stoxx 600 today, falling 1.5 percent.

HSBC, Europe’s largest bank, lost 2.2 percent to 684 pence after Exane downgraded the shares to “underperform” from “neutral.” Barclays Plc, the U.K.’s second-biggest bank, sank 2.2 percent to 310.7 pence as Credit Suisse Group AG cut its price estimate on the shares by 13 percent, saying its forecasts imply a “sizeable capital deficit,” according to a report to clients today. The bank has an “outperform” recommendation on the stock and said “this is a relative call rather than a particularly upbeat view on Barclays’ shares.”

Cadbury climbed 3.7 percent to 837 pence. Investors will get 840 pence a share, including 500 pence in cash and the rest in stock, Kraft said today. Cadbury will also pay its holders an additional 10 pence dividend once the offer is unconditional. The new bid is about 9 percent higher than Kraft’s previous offer and consists of 40 percent stock and 60 percent cash.

SABMiller, Daimler

SABMiller Plc retreated 2.9 percent to 1,767 pence. The world’s second-biggest brewer posted beer volumes that missed analysts’ estimates as China’s worst snowstorms in 50 years kept drinkers at home and South African consumers reined in spending.

Daimler AG lost 1.4 percent to 36.59 euros after Nomura Holdings Inc. cut its recommendation on the German maker of luxury cars and trucks to “neutral” from “buy.” France’s Renault SA slid 2.9 percent to 38.14 euros as Nomura also downgraded the stock to “neutral” to “buy.”

Burberry Group Plc, the U.K.’s largest luxury retailer, rallied 3.5 percent to 620.5 pence after it reported third- quarter sales growth that beat estimates and said full-year profit will be “towards the top end” of analysts’ forecasts.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net