Banks and mining stocks lead European retreat

Eurostoxx 50: 2,332.52 (–39.63) Frankfurt DAX: 5,914.84 (–79.63) Paris CAC: 3,186.94 (–42.82)EUROPEAN STOCKS fell from a two-month high yesterday, as Chinese exports slowed and the European Central Bank warned imposing further losses on holders of Greek debt posed a risk to the euro area's financial stability.

“It’s too early to conclude that the euro zone problems will be solved,” said Henrik Drusebjerg, a senior strategist at Nordea Bank in Copenhagen. “It’s not the first time European politicians have pledged to handle the problem once and for all.”

European banks extended losses as the European Central Bank said financial institutions’ involvement in euro zone bailouts through enforced investor losses posed a risk to financial stability and would have “direct negative effects” on lenders.

Austria’s Raiffeisen Bank International dropped 3.2 per cent to €22.50 and Commerzbank, Germany’s second-biggest lender, slipped 5.4 per cent to €1.75. UniCredit plunged 12 per cent to €92.7, its largest slide since March 2009.

China’s export growth slowed to its weakest pace in seven months. Officials said that trade faces “severe challenges” as the yuan strengthens and confidence slides in developed nations.

Carrefour sank 5.9 per cent to €16.85 after the world’s second-largest retailer lowered its forecast for the second time in three months.

A gauge of mining shares posted the second-worst performance of the 19 industry groups on the Stoxx 600.

Kazakhmys led commodity companies lower, falling 5.7 per cent to 878.5p. Antofagasta, a copper producer controlled by the Luksic family, Chile’s richest, dropped 6.3 per cent to 1,078p.

Roche sank 4.5 per cent to 140.90 Swiss francs after Europe’s second-largest drug maker reported revenue that fell 15 per cent as the franc gained and revenue declined for the company’s three top medicines.

Alcatel-Lucent increased 5.3 per cent to €2.18 after the Financial Times reported the company agreed to sell the call-centre business for $1.5 billion to private- equity firm Permira Advisers.

Rolls-Royce jumped 9.9 per cent to 688p after the jet-engine maker agreed to sell its share in a venture making engines for the Airbus A320 aircraft. – (Bloomberg)