European stocks drop, extending the Stoxx Europe 600 Index’s biggest weekly drop in four months, as Cypriot lawmakers begin a debate to unlock bailout funds and prevent a financial collapse. U.S. index futures were little changed, while Asian stocks retreated.
European stocks declined, extending the Stoxx Europe 600 Index’s biggest weekly drop in four months, as Cypriot lawmakers begin a debate to unlock bailout funds and prevent a financial collapse. U.S. index futures were little changed, while Asian stocks retreated.
MAN SE slid 4.4 percent after saying Volkswagen AG will offer other holders of the truckmaker’s stock 80.89 euros per share to get full control. Temenos Group AG (TEMN), a Swiss banking software maker, added 1.2 percent after saying it will buy Trinovus LLC to expand in the U.S. banking market and as it raised revenue guidance.
The Stoxx Europe 600 Index fell 0.3 percent to 293.59 at 8:40 a.m. in London. Futures on the Standard & Poor’s 500 Index dropped less than 0.1 percent, while the MSCI Asia Pacific Index slipped 0.6 percent. The Stoxx 600 is heading for a 1.3 percent drop this week, snapping four straight weeks of gains.
“The fears are that if Cyprus doesn’t find a solution in time and agree for a bailout, the European Central Bank will stop providing liquidity to its banks, leading the country to a collapse and a euro exit,” said Stephane Ekolo, chief European (SXXP) strategist at Market Securities in London. “If Cyprus does exit the euro area, the euro region will definitely enter into uncharted territory, with unpredictable consequences.”
Cypriot lawmakers will begin debate today on legislation to unlock bailout funds. The ECB has said it will cut emergency funds for the Mediterranean island’s lenders after March 25 unless it agrees on a bailout with international creditors.
Euro-area finance ministers expect a proposal from Cyprus “as rapidly as possible” to raise the 5.8 billion euros ($7.5 billion) needed to trigger the emergency loans, they said in a statement late yesterday after meeting in a teleconference.
Cyprus didn’t get the financial support it sought from Russia, but the two countries will continue talking, Cyprus Finance Minister Michael Sarris said.
The race for a compromise comes after a week of tumult marked by Cypriot lawmakers’ rejection of a tax on bank deposits. That was demanded by the other 16 euro countries and the International Monetary Fund as the condition for a 10 billion-euro rescue.
German business confidence probably rose to the highest in almost a year in March, adding to signs that Europe’s largest economy will return to growth even as Cyprus inflames the region’s debt crisis.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, will climb to 107.8 from 107.4 in February, according to the median of 42 forecasts in a Bloomberg News survey. That would be the fifth straight gain and the highest reading since April last year. Ifo releases the report at 10 a.m. in Munich today.
The French economy will extend two years of stagnation in the first half as consumers hold off on spending and companies cut investments, national statistics office Insee predicted. Gross domestic product will be unchanged in the first quarter and expand 0.1 percent in the second, Insee said late yesterday in a report.
MAN lost 3.80 euros to 83.30 euros. VW, Europe’s largest carmaker, will offer other holders of MAN stock 80.89 euros per share in a bid for full control of the German truckmaker. VW, which already owns 75.03 percent of the Munich-based company’s voting rights, will set the final cash offer after it receives valuation reports from auditors, MAN said yesterday in a statement.
TNT Express retreated 0.9 percent to 5.91 euros after JPMorgan cut its recommendation on the shares to neutral from overweight, with a nine-month price target of 6.70 euros per share.
Temenos rose 25 cents to 21.70 euros. The Swiss banking software maker said it will buy Trinovus to expand in the U.S. banking market. The company raised its 2013 revenue guidance to a range of $470 million to $483 million.
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