By Dow Jones Business News, March 13, 2013, 11:15:00 AM EDT
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets stayed under pressure on Wednesday as investors moved to cash in on
recent gains. A weak start for Wall Street and a costly Italian bond auction didn't help sentiment.
ASM International NV, Commerzbank AG and Inditex SA were among the biggest decliners, while Prudential PLC was among
The Stoxx Europe 600 index fell 0.1% to 295.03 after eking out a gain of less than 0.1% in a lackluster session
Tuesday after data showed the U.K. slipping back into recession.
The index pared some losses after better-than-expected U.S. retail sales data. Still, U.S. stocks opened lower which
meant the pressure on Europe stocks eased only slightly. Asia stocks also finished weaker.
Banks were among the biggest decliners. Among those losing ground, shares of Commerzbank AG fell more than 8% after
the German bank reportedly announced a EUR2.5 billion ($3.25 billion) capital increase to repay the rest of the EUR16
billion in hybrid capital it got from the German government over four years ago.
Another big mover, ASM International ( ASMI ), sank 13% after the Dutch semiconductor firm said it would sell an 8% to
12% stake in ASM Pacific Technology Ltd via a partial secondary share placement. The company said it was making this
move in order to address the nonrecognition by markets of the value of the combined business of the company.
Atif Latif, director of trading, equities and derivatives at Guardian Stockbrokers, said Europe markets have seen some
profit-taking on Wednesday, given the decent rally seen over the past few sessions. On a one-month basis so far, the
Stoxx 600 is up 2.3%.
"We don't see this dip today as anything too concerning as buyers are still re entering the market on weakness," Latif
said in emailed comments. "This is seen as healthy as money is flowing back in and we continue European equity markets
have moved lower along with the Euro while yields in Europe's periphery are on the increase."
Italian stocks were a big loser on Wednesday. Borrowing costs rose in the country's first bond auction since the
government's credit rating was cut to BBB plus from A minus by Fitch Ratings last week, which put some pressure on bond
yields. The FTSE MIB Italy index slid 1.5% to 15,784.06.
Shares of Enel fell more than 6% after the Italian utility reportedly posted a drop in net income for 2012. But
several Italian banks were also down a chunk, with Unione di Banche Italiane SCpA down more than 5%.
Another peripheral market under pressure was Spain. Heavyweight retailer Inditex fell nearly 3% after the group
reported a 22% profit rise, but analysts were disappointed by fourth-quarter sales, gross margin, cash generation, its
dividend and store-opening guidance.
The Spain IBEX 35 fell 0.9% to 8,458.70, making it one of the worst-performing regional markets.
Data out of the euro zone was also not doing much for sentiment. January industrial-production fell 0.4% on a monthly
basis, a steeper-than-expected decline and the fourth fall in five months, said economists at Capital Economics.
"January's fall in euro-zone industrial production is a timely reminder that, despite the improvement in business and
financial market sentiment, the region may have remained in recession in Q1," said Ben May, European economist in a
Sluggish manufacturing output data out of the U.K. on Tuesday raised fears that economy is headed for a triple-dip
recession and weighed on the British pound. That helped the U.K. index some a day prior, but it was backfooting
Wednesday as investors sold off big banks and resource stocks.
HSBC PLC ( HBC ) fell 1% and Standard Chartered PLC dropped nearly 2%.
Along with the banks, losses of 2% or more from miners such as Rio Tinto PLC (RIO) and BHP Billiton PLC ( BHP ) dragged
the FTSE 100 index close to a full percent lower to 6,455.08.
The German DAX 30 index kept its losses to a minimum, trading flat at 7,958.85, despite the tumble for Commerzbank.
Shares of Deutsche Bank AG fell 1%, but losses were contained for some of its heaviest weighted stocks.
Shares of Volkswagen AG fell 1% as autos fell across Europe on Wednesday. Renault SA lost 1.6%. The French CAC 40
index fell 0.3% to 3,830.17.
Shares of L'Oreal SA rose 1%, helping support the French index.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.