Europe Stocks Snap Three-Day Winning Streak as All Await Yellen

(Bloomberg) -- European shares fell for the first time in four days as disappointing German sentiment data highlighted lingering concern about global growth before Federal Reserve Chair Janet Yellen’s Friday address in Jackson Hole, Wyoming.

The Stoxx Europe 600 Index slid 0.8 percent to 342.24 at 11:27 a.m. in London, with almost all industry groups falling. Germany’s equity benchmark DAX Index fell 0.9 percent, for the biggest decline among major western-European markets, as a report from the Ifo institute showed business sentiment in the region’s largest economy unexpectedly slipped in August. France’s CAC Index and Switzerland’s SMI Index lost at least 0.7 percent.

“Ifo is influencing markets today, but all eyes are on Yellen,” said Ralf Zimmerman, an equity strategist at Bankhaus Lampe in Dusseldorf, Germany. “Investors won’t position too aggressively ahead of the Yellen speech.”

Investors are seeking clues on the trajectory of U.S. interest rates, with Yellen’s upcoming address looked to for some clarity after recent hawkish comments from Fed officials. Fed funds futures indicate a 54 percent chance of a U.S. interest-rate hike this year, up from 36 percent at the start of August.

The rally that lifted the Stoxx 600 as much as 12 percent since the Brexit vote stumbled last week on growing concerns over the European Central Bank’s ability to spur growth amid political turmoil and a banking crisis in Italy. A Bank of America Corp. report showed investors withdrew money from the region’s equity funds for a record 28 straight weeks.

While recent economic data have beaten forecasts, and the Stoxx 600 rose 1.4 percent this week through Wednesday, today’s worse-than-forecast reading on German confidence indicates that companies remain cautious about prospects after Britain’s decision to leave the European Union.

European pharmaceutical shares followed their U.S. peers lower after comments from Democratic presidential candidate Hillary Clinton revived concerns about potential drug pricing changes. Glencore Plc and ArcelorMittal led a gauge of miners to one of the worst performances on the Stoxx 600 as iron ore retreated.

Among stocks moving on corporate news today:

• Fiat Chrysler Automobiles NV gained 1.1 percent after a report that Samsung Electronics Co.’s vice chairman will visit Europe at the end of the week to discuss the acquisition of the carmaker’s Magneti Marelli auto-parts unit.

• Playtech Plc rose 4.2 percent after the gambling-software provider reported an increase in first-half revenue and announced a special dividend.

• Jimmy Choo Plc added 5.3 percent after the maker of luxury shoes posted higher first-half revenue and earnings and said it remains optimistic on this year’s prospects.

• CRH Plc rose 3.4 percent after the Irish construction company posted higher-than-expected first-half sales and profit.

To contact the reporters on this story: Alan Soughley in Frankfurt at asoughley@bloomberg.net, Aleksandra Gjorgievska in London at agjorgievska@bloomberg.net. To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net, Alan Soughley

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