Stocks fall after inflation report
European stocks slipped for a second day as an inflation report led to concern that China has less room for monetary easing, while the trade deficit of the US unexpectedly widened.
BHP Billiton slid 2.6 per cent, for the biggest drag on the Stoxx Europe 600 Index. Tullow Oil slumped 4.8 per cent after saying it will write off $299 million in 2012. SAP gained 1 per cent after unveiling the most significant overhaul of its enterprise software in two decades.
The Stoxx 600 lost 0.3 per cent to 286.73 at 1.47pm in London.
The equity benchmark is headed for a decline of 0.4 per cent this week.
The volume of shares changing hands on the Stoxx 600 shares was 32 per cent greater than the 30-day average, according to data compiled by Bloomberg.
"The Chinese inflation report is what is weighing on equities today as it has some investors worried that it could limit the degree of further stimulus in China," Mark Andersen, co-head of asset allocation at UBS in Zurich, said.
"We still think the positive growth momentum is supportive of markets. We're seeing a synchronized pickup of growth on a global basis, providing investors with an underlying positive sentiment."
European stocks declined from a 22-month high yesterday as European Central Bank policy makers left their benchmark interest rate at a record low.
In the US, a Commerce Department release showed that the country's trade deficit widened to $48.7 billion in November from a revised $42.1 billion in October.
The median forecast of 69 economists in a Bloomberg survey had called for a deficit of $41.3 billion.
China's inflation accelerated more than forecast to a seven-month high, limiting room for monetary easing to support the recovering economy.
The consumer price index rose 2.5 per cent in December from a year earlier, exceeding the 2.3 per cent median estimate of 42 economists.