European stocks dropped after posting their longest run of weekly rallies since October, as concern returned over China’s economic slowdown.
The Stoxx Europe 600 Index slid 0.4 percent at 9:25 a.m. in London, reversing an earlier advance, with commodity producers and automakers leading the loses. China outlined an economic expansion of 6.5 percent to 7 percent for this year, with 6.5 percent pegged as the baseline through 2020. That would be less than last year’s 6.9 percent rate, the slowest growth in a quarter century.
“People are now taking profits after a decent run in the last weeks,” said Konstantin Giantiroglou, head of investment advisory and research at Neue Aargauer Bank in Brugg, Switzerland. “Economic data will become the dominant factor as everything looks so fragile, especially now ahead of ECB. The market expects the ECB to do something.”
European equities rallied for three straight weeks, their longest streak since October, after concern that the global economy is slowing and a rout in banks took the Stoxx 600 to its lowest level since September 2013. It’s regained almost 13 percent through Friday, when it closed at its highest level since Jan. 29. Companies on the gauge traded at 14.8 times estimated earnings, still lower than the multiple of 16.7 reached last April.
Investors are now waiting for Thursday’s European Central Bank meeting after President Mario Draghi said in January officials may reconsider monetary policy at the gathering. Since then, inflation has turned negative and economic data have started missing forecasts. Gross domestic product figures are due on Tuesday.
Some companies are moving on deals announcements. BASF SE slipped 2.2 percent after people familiar with the matter said the company is working with advisers and financing banks on the merits of making a counter bid for DuPont Co., which agreed to a merger with Dow Chemical Co. in December. Old Mutual Plc surged 8.4 percent after saying it’s considering all options as part of a strategic review. Sky News reported the insurer is drafting a plan to split itself up into standalone businesses.
Fomento de Construcciones & Contratas SA surged 15 percent after billionaire Carlos Slim bid for the Spanish builder.
Among other stocks moving on corporate news, Electricite de France SA sank 7.1 percent as its chief financial officer quit following a disagreement with the company’s chief executive officer. Just Eat Plc lost 6.3 percent after saying top managers at the company sold most of their stock.