European Stocks Retreat as Man Group Tumbles; U.S. Index Futures Advance

By Adria Cimino - Sep 28, 2011 7:45 PM GMT+0700
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Traders speak to one another on the floor of Frankfurt stock exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg

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Sept. 28 (Bloomberg) -- Andrew Milligan, head of global strategy at Standard Life Investments Ltd., talks about U.S. and European equities. He speaks from Edinburgh with Francine Lacqua on Bloomberg Television's "The Pulse." (Source: Bloomberg)

European stocks fell, snapping the biggest three-day rally in 16 months, after a report that some countries are demanding private creditors take bigger writedowns on Greek bonds. Asian shares and U.S. futures rose.

Man Group Plc (EMG) sank the most in almost three years as the world’s biggest hedge fund said assets under management will decrease. Cairn Energy Plc (CNE) slid 4.5 percent after abandoning an exploration well. PSA Peugeot Citroen, Europe’s second-largest carmaker, declined 2.5 percent as Goldman Sachs Group Inc. advised selling the shares.

The Stoxx Europe 600 Index slid 0.5 percent to 228.7 at 1:44 a.m. in London, having earlier risen the same amount. The gauge had surged 7 percent over the past three days, the biggest rally since May 2010, amid speculation policy makers will increase efforts to contain the region’s debt crisis. The Financial Times reported late yesterday that some euro-area countries are demanding private creditors take bigger writedowns on their Greek bond holdings.

“We’re evaluating how much banks must take in additional provisions,” said Pierre Mouton, a fund manager at Notz Stucki & Cie. in Geneva, who helps oversee $7.5 billion. “The market would be able to forget all of this if the problem stops at Greece. What is stopping the market from rebounding is concern about Italy.”

The MSCI Asia Pacific Index gained 0.4 percent and futures on the Standard & Poor’s 500 Index advanced 0.3 percent.

Greek Aid

German Chancellor Angela Merkel said today that she’s waiting for a report from the European Union, European Central Bank and International Monetary Fund on Greece’s budget progress before deciding whether revisions are needed to the financing package agreed in July. Euro-area leaders announced 159 billion euros ($229 billion) in new aid for Greece on July 21 and cajoled bondholders into footing part of the bill.

The Stoxx 600 fell 26 percent from this year’s peak in February through Sept. 22 amid concern the European debt crisis is spreading and the global economic recovery is faltering. The decline left the measure trading at 9 times estimated earnings, the cheapest since March 2009, data compiled by Bloomberg show.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net.