ZURICH: European stocks declined, extending a two-month low, as U.S. President Barack Obama said Bush-era tax cuts for high earners should expire at the start of 2013 and the euro area entered its second recession in four years. U.S. index futures fluctuated, while Asian shares slipped.
Zurich Insurance Group AG retreated 3.7% after Switzerland’s biggest insurer reported quarterly profit that missed analysts’ estimates. SBM Offshore NV and Man Group Plc declined at least 4% after MSCI Inc. removed the shares from some of its indexes. Hennes & Mauritz AB (HMB) fell 3.7% after Europe’s second-largest clothing retailer said sales missed some estimates in October.
The Stoxx Europe 600 Index slid 0.9% to 265.86 at 12:33 p.m. in London. The gauge has still rallied 14% from this year’s low on June 4 as European Central Bank President Mario Draghi said he would protect the euro and the Federal Reserve announced a third round of quantitative easing. Standard & Poor’s 500 Index futures were little changed, while the MSCI Asia Pacific Index slipped 0.4%.
“The fiscal-cliff issue is more about increasing taxes and not about reducing spending,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “Even if a compromise on the cliff is found, it most likely won’t be until December, leaving November vulnerable.” (Bloomberg/tw)
The Stoxx 600 has lost 3.1 percent since the re-election of President Barack Obama on Nov. 6 as investors turned their attention to the U.S. fiscal cliff, the $607 billion of tax increases and spending cuts that automatically come into force at the beginning of next year.