European Stocks Are Little Changed as St. James’s Drops

European stocks were little changed, near their highest level in 4 1/2 years, after a report showed U.K. manufacturing output unexpectedly contracted. U.S. index futures and Asian shares declined.

St. James’s Place Plc dropped the most this year after Lloyds Banking Group Plc reduced its stake in the wealth- management business. Pirelli & C. SpA slid 3.6 percent after forecasting 2013 earnings that fell short of analysts’ estimates. Antofagasta Plc posted its biggest gain in more than two months after the copper producer more than doubled its dividend from a year earlier.

The Stoxx Europe 600 Index added 0.1 percent to 295.41 at 12:54 p.m. in London. The gauge has surged 5.6 percent this year as U.S. lawmakers agreed on a compromise federal budget. The European equity benchmark rose to its highest level since June 2008 last week. Futures on the Standard & Poor’s 500 Index decreased 0.2 percent today, while the MSCI Asia Pacific Index retreated 0.3 percent.

“We’re getting more cautious about this top of the equity market, and we’re beginning to think maybe you should take some risk off the table,” said Philippe Bonnefoy, who oversees $565 million as chief investment officer at Newscape Capital Group. He spoke in an interview on Bloomberg Television. “Analysts have been pretty positive and aggressive on earnings and you’ve seen earnings downgrades rather than upgrades in many cases.”

Of the 268 companies on the Stoxx 600 that have posted quarterly earnings this season, 49 percent have beaten analysts’ profit projections, according to data compiled by Bloomberg. That compares with 52 percent for the previous quarter.

Volumes Drop

The number of shares changing hands in Stoxx 600-listed companies was 18 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.

The Stoxx 600 rallied 2.3 percent last week, its biggest advance in two months, as a report showed the U.S. economy created more jobs than forecast and optimism mounted that central banks will continue to stimulate their economies.

U.K. manufacturing output slipped 1.5 percent in January after increasing a revised 1.5 percent in December, according to a statement from the Office for National Statistics. Economists had predicted the measure would be unchanged. Total industrial production in the European Union’s third-largest economy declined 1.2 percent in January after gaining 1.1 percent in the previous month, separate figures showed. Economists had called for a 0.1 percent increase.

St. James’s Declines

St. James’s Place lost 3.2 percent to 519.5 pence. Lloyds sold 102 million shares in the company, leaving the bank with a 37 percent stake. Britain’s biggest mortgage lender said it will make a gain of 400 million pounds ($595 million) from the sale and the revaluation of its remaining holding. Lloyds added 1.3 percent to 50.7 pence.

Pirelli retreated 3.6 percent to 8.60 euros after Europe’s third-largest tiremaker forecast earnings before interest and taxes of 810 million euros ($1.1 billion) to 850 million euros in 2013. That compared with the average analyst estimate of 875 million euros in a Bloomberg survey.

Fresnillo Plc dropped 1.9 percent to 1,462 pence. The silver and gold producer posted net income of $736.1 million for 2012, less than the average analyst of $761.4 million. Fresnillo also said it will consider selling shares to increase its free float so that it can stay in the U.K.’s FTSE 100 Index.

Geberit, Antofagasta

Geberit AG slipped 2.6 percent to 225.90 Swiss francs after the Swiss toilet maker predicted that construction will probably contract in Europe in 2013 as governments reel in spending and lending. The company depends on the region for more than 90 percent of its sales.

Antofagasta jumped 5 percent to 1,150 pence after the copper producer controlled by Chile’s Luksic family proposed a dividend of 98.5 cents a share, compared with 44 cents a year earlier. The average analyst estimate had called for a dividend of 58 cents.

SBM Offshore NV surged 20 percent to 12.89 euros, its biggest rally since at least October 1989, after agreeing to pay $470 million to settle the dispute over its Yme platform in the North Sea with Talisman Energy Inc. The world’s biggest supplier of floating oil rigs said it will take a provision of $270 million in addition to the $200 million that it set aside in December.

(Source: Bloomberg)