European stocks extended their lowest level in almost two months, on track for a second weekly decline.
Equities are falling this week, before the Federal Reserve’s Dec. 16 meeting, at which traders are pricing in a 76 percent chance that officials will raise rates. The Stoxx Europe 600 Index fell 0.7 percent at 9:36 a.m. in London, taking its weekly loss to 2.6 percent. All 19 industry groups declined, led by carmakers. Renault SA and BMW AG dropping at least 2.2 percent.
The Stoxx 600 has lost 6.4 percent in December amid a rout in commodity companies and disappointment over the European Central Bank’s last meeting. It advanced in the final month of five of the past six years.
“Although everyone is expecting a rate hike from the Fed next week, a lot of questions remain about the future of monetary policy,” said Francois Savary, chief investment officer at Geneva-based investment management firm Prime Partners. You currently have one central bank in a tightening cycle, and the other can’t actually deliver on expectations. The ECB’s disappointment last week showed that Draghi’s hands are tied. That’s why investors are so unsettled now.”
The volume of shares trading on Stoxx 600 companies was 17 percent lower than the 30-day average, data compiled by Bloomberg show.
Among stocks active on corporate news, Eurofins Scientific SE tumbled 9 percent after canceling a share sale, citing poor market conditions. Old Mutual Plc, which gets more than two-third of its revenue from southern Africa, slid 8.7 percent. It’s heading for its worst two-day drop since 2009 after South Africa’s president fired his finance minister yesterday.
Suez Environnement Co. rose 2 percent after Les Echos reported that Engie, its biggest shareholder, is considering taking control of the company. Bellway Plc added 3.2 percent after the British homebuilder forecast its average selling price will increase about 10 percent this financial year.
Patrick Abboud
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