European Stocks Retreat Amid Greece Concern as Lenders Decline – Bloomberg

(Bloomberg) — A drop in banks led European stocks lower, with concern growing over the political situation in Greece as Prime Minister Alexis Tsipras reaffirmed his rejection of the country's international bailout program.

The Stoxx Europe 600 Index fell 1 percent to 369.69 at 11:48 a.m. in London and dropped as much as 1.4 percent. With a 2 percent decline, lenders contributed the most to the gauge's retreat. Greece's ASE Index lost 5.9 percent as Eurobank Ergasias SA and Piraeus Bank SA slid more than 9.5 percent. Spanish and Italian stock measures fell the most in the region after the Greek gauge.

"The word to describe the situation would be fear," said John Plassard, vice president at Mirabaud Securities LLP in Geneva. Tsipras's speech "raises concerns of tensions and fears for the worst for Greek banks and European banks," he said.

Tsipras isn't backing down from pledges that would breach conditions of the bailout aid. He vowed to increase the minimum wage, restore the income tax-free threshold and halt infrastructure privatizations. His Sunday speech also included demands for World War II reparations from Germany and the repayment of forced loans Greece made to the Nazi regime during the country's occupation. Euro area's finance ministers will hold an emergency meeting on Feb. 11 in Brussels.

Spain's IBEX 35 Index and Italy's FTSE MIB Index retreated more than 1.8 percent. Germany's DAX Index lost 1.7 percent after a report showed the nation posted a record current-account surplus in 2014.

The Stoxx 600 is falling for the first time in six days, with most of its 19 industry groups down. Automakers dropped 2.6 percent as Renault SA, Volkswagen AG and Bayerische Motoren Werke AG fell more than 2.9 percent.

HSBC Holdings Plc slid 1.7 percent after a report by the International Consortium of Investigative Journalists showed its private-banking unit made profits for years handling secret accounts for criminals. UBS Group AG lost 1.7 percent as people familiar with the matter said the U.S. Justice Department is looking into whether the Swiss bank misled clients in the marketing and selling of some foreign-exchange structured products.

BNP Paribas SA declined 3.7 percent after JPMorgan Chase & Co. downgraded the stock to a rating similar to sell, citing concerns that higher costs will hurt returns. Spain's Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA dropped more than 2.7 percent, and Italy's Intesa Sanpaolo SpA lost 3 percent.

Commodity producers climbed. Glencore Plc added 1.3 percent and Statoil ASA increased 2.5 percent. BG Group Plc rose 1.1 percent as its new chief executive officer starts three weeks earlier than planned.

European shares are falling after the Stoxx 600 advanced 1.7 percent last week as the U.S. added more jobs in January than forecast and Greece retreated from a plan to ask the euro area to write down debt. The ASE rallied the most since November in the period.

(A previous version corrected a typo in the name of the International Consortium of Investigative Journalists.)

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Namitha Jagadeesh