European stocks fell as Iraq fighting intensified while manufacturing and services activity in the euro area weakened. Copper (COMEX:HGN14) led industrial metals higher and Australia’s dollar (CME:A6M14) strengthened as China’s factory orders beat estimates.
The Stoxx Europe 600 Index fell 0.4% at 8:40 a.m. in New York. Standard & Poor’s 500 Index (CME:SPM14) futures swung between gains and losses after the gauge closed at a record last week. Copper advanced 0.7% and zinc increased 0.6%. The Aussie strengthened against all of its 16 major peers. Dubai stocks entered a bear market.
Fighters from an al-Qaeda breakaway group seized all Iraq’s border crossings with Jordan and Syria. Reports showed euro-area manufacturing and services activity retreated this month amid a further slowdown in France’s economy, while Chinese manufacturing rose to a seven-month high in June. U.S. sales of existing homes probably increased in May, economists said before data from the National Association of Realtors.
“Bullish sentiments are muted due to geopolitical risk,” said Manish Singh, who helps oversee about $2 billion as head of investments at Crossbridge Capital in London. “A deterioration in euro-area manufacturing, especially in France, where it continues to be a major drag, as well as increasing uncertainty in Iraq, which begets higher oil prices and hurts consumption, are a drag on the market.”
16 of the 19 industry groups in the Stoxx 600 fell, with trading volumes 13% less than the 30-day average, data compiled by Bloomberg show. The gauge gained 0.3% last week, closing 0.5% short of a six-year high.
The euro-area PMI composite gauge slipped to 52.8 in June, less than the 53.4 reading from the median of 25 estimates in a Bloomberg survey of economists.
Distribuidora Internacional de Alimentacion SA advanced 2.7% after the Spanish discount grocer said it would sell its French business to Carrefour SA.
Oracle Corp. agreed buy Micros Systems Inc. for $4.6 billion, offering stockholders $68 a share in cash, Oracle said in a statement today. Micros shares closed at $65.77 on June 20.
S&P 500 futures expiring in September were little changed today after the index rallied 1.4% last week. It closed at an all-time high of 1,962.87 on June 20.
The National Association of Realtors report at 10 a.m. New York time may show that previously owned U.S. home purchases climbed to a 4.74 million annualized rate in May, according to economists in a Bloomberg News survey. They rose to a 4.65 million rate the previous month.
The MSCI Emerging Markets Index declined less than 0.1%. India’s Sensex dropped 0.3%.
Dubai’s benchmark gauge retreated 4.3% by the close, extending declines from a peak in May to more than 20%, the threshold for a bear market. The decline was led by real estate stocks including Arabtec Holding Co., which tumbled 9.9% after three people familiar with the matter said the company dismissed hundreds of staff, including several senior executives.
The ruble gained 0.8% versus the dollar while Russia’s Micex index added 0.1%. Russian President Vladimir Putin voiced support June 21 for a cease-fire in Ukraine declared by the former Soviet republic’s new president, Petro Poroshenko.
Uganda’s shilling slumped 0.9% to the lowest level since August after the U.S. government said it was cutting aid to the East African nation over a February law that toughened punishment for homosexual acts.
The S&P GSCI gauge of commodities climbed as much as 0.6% to the highest level since Aug. 28. The index advanced for an eighth day, the longest streak since November 2010. Copper rose to $6,869 a metric ton, the seventh consecutive advance and the longest run of gains since Dec. 16. Zinc rallied as much as 0.8% to $2,195 a ton, the highest since February 2013.
A preliminary Purchasing Managers’ Index for China, the biggest consumer of industrial metals, rose to 50.8, exceeding the 49.7 median estimate of analysts in a Bloomberg survey, according to a report by Markit and HSBC Holdings Plc.
Australia’s dollar climbed 0.5% to 94.37 U.S. cents after rising to 94.45, the strongest since April 10. New Zealand’s currency advanced 0.3% to 87.28 U.S. cents after reaching 87.49, the highest since May 6. China is Australia and New Zealand’s biggest trading partner.
The euro weakened against all but two of its 16 major counterparts, slipping 0.3% versus the yen.
German government bonds rose, pushing the yield one basis point lower to 1.33%. The rate on 10-year Treasury notes was little changed at 2.61%.
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