European stocks fall, reversing earlier gains

European stocks fell, reversing earlier gains, as concern persisted about the prospects for global growth.

Carmakers declined as the euro strengthened against the dollar, with BMW and Continental down 2.6 per cent or more.

Banks slid the most among Stoxx Europe 600 Index industry groups, led by Italian lenders.

British American Tobacco and 12 other companies traded without the right to dividends today, shaving 0.2 point off the Stoxx 600.

Europe’s benchmark slid 0.8 per cent at 2:34 p.m. in London, reversing an early advance of as much as 0.4 per cent.

The Federal Reserve late yesterday signaled a slower pace of rate increases, citing the potential impact from weaker global growth and financial-market turmoil.

China’s slowdown and a deepening rout in oil stoked investor worries earlier this year, dragging the Stoxx 600 into a bear market.

While the gauge rebounded as much as 14 per cent since a February 11 low amid a rally in banks and miners, it’s now heading for its first weekly decline in five, down 1.1 per cent.

Banco Popolare and Banca Popolare di Milano Scarl led a third day of declines in lenders, tumbling 6.8 per cent or more amid speculation of hurdles to a merger between the two.

Banks, the worst hit in this year’s rout, are heading for their longest losing streak in a month. The dollar’s weakening after the Fed meeting hurt European exporters and helped commodity producers.

Germany’s DAX Index dropped 1.6 percent for one of the worst performances in western Europe, while miners rallied the most in two weeks.

Anglo American and Glencore jumped 8 percent or more.

Rio Tinto Group gained 4.3 per cent after saying Jean- Sebastien Jacques will replace Sam Walsh as chief executive officer in July.

Among shares active on corporate news, Deutsche Lufthansa fell 5.8 per cent after the carrier forecast weak earnings growth this year, as low ticket pricing meant it couldn't fully benefit from cheap oil prices.

Immofinanz slid 11 per cent after the real-estate company reported a nine-month loss, with its Russia portfolio hurt by currency swings.