By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks dropped Monday,
pressured by a selloff on Wall Street that left the Nasdaq
Composite with its worst drop in two months.
The Stoxx Europe 600 fell 1.4% to 334.96, marking the first loss
for the index in nine sessions. The move followed Friday's slide in
U.S. stocks, led by heavy selling in so-called momentum stocks such
as biotechs and Internet companies.
The worst price performer Monday on the pan-European index was
Bouygues SA , falling 6% for its biggest decline since late-August
2012, according to Factset data. The slide came after the company's
bid for Vivendi SA's French mobile unit SFR was rejected in favor
of an offer from Altice SA. Vivendi shares, meanwhile, ended up
0.3%, but settled off session highs.
European stocks on Friday rose following a German newspaper
report that the European Central Bank had modeled the impact of 1
trillion euros ($1.37 trillion) of quantitative easing, raising the
prospect the bank may take action to fight low inflation. The Stoxx
Europe 600 ended last week with its third consecutive weekly
advance.
For Europe, the risk of quantitative easing and lower interest
rates "would seem to encourage equity market flows," but "negative
sentiment is prevailing" in the region, said Brown Brothers
Harriman in a report Monday.
An ECB official said Monday the bank is sketching out plans for
asset purchases if they are warranted, but an immediate program
launch doesn't appear likely. The risks of inflation and deflation
"are more or less level in EMU area which means that we do not see
an imminent risk of deflation. However, we are ready to prepare for
such a situation," Yves Mersch, a member of the bank's executive
board, was quoted as saying by Reuters.
Meanwhile, ECB Governing Council member Ewald Nowotny, speaking
on the sidelines of a conference in Vienna, said he would prefer
asset purchases to focus on asset-backed securities rather than
government bonds, The Wall Street Journal reported.
The German DAX 30 was shoved sharply lower, down 1.9% to
9,510.85. German stocks found no relief following a report that the
country's industrial production expanded 0.4% in February compared
with the previous month, above a consensus estimate of 0.3%
growth.
Shares of HeidelbergCement AG in Frankfurt had been higher
following news that cement maker Lafarge SA and Switzerland's
Holcim Ltd. plan to merge into the world's biggest
building-materials group. But HeidelbergCement shares eventually
turned lower, by 2.6%, leaving none of the DAX's components with
gains for the session.
Holcim plans to tender for Lafarge, exchanging one Holcim share
for each Lafarge share. The deal for the new company, to be called
LafargeHolcim, is expected to close in the first half of 2015.
Shares of Holcim rose 1.6%.
Lafarge shares climbed 2.6%, the best performing stock on both
the Stoxx Europe 600 index and France's CAC 40 . The French equity
index as a whole, however, fell 1.1% to 4,436.08.
The U.K.'s FTSE 100 also lost ground, by 1.1% at 6,622.84. More in London Markets.
In other movers Monday, Roche Holding AG fell 1.9% after the
Swiss cancer-drug specialist said it has acquired privately held
Massachusetts-based IQuum in a deal worth $450 million. Roche will
pay IQuum shareholders $275 million upfront and up to $175 million
on products hitting milestones.
Meanwhile, Russian stocks slid, with the MICEX index dropping
2.4% as the Ukraine-Russia conflict kept investors on edge.
Ukraine's defense ministry reportedly said one of its naval
officers was shot by a Russian soldier in eastern Crimea. Also,
Ukrainian anti-government protesters on Sunday seized regional
government headquarters in two cities. The RTS benchmark lost 3.3%
to 1,193.78.
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