Europe Stocks Fall as Banks Drop Amid Hong Kong Protests

Frankfurt (Sept 29)   A decline in bank shares led European stocks lower, with HSBC Holdings Plc weighing on the benchmark index amid pro-democracy protests in Hong Kong. U.S. index futures and Asian shares also dropped.

HSBC and Standard Chartered Plc slid more than 1.7 percent each as they shuttered some Hong Kong branches as protesters stayed on the streets after clashes with police. Commerzbank AG fell 3.7 percent after a person with knowledge of the matter said the lender faces a U.S. inquiry into whether it broke anti-money-laundering laws. Balfour Beatty (BBY) Plc slid 20 percent after signaling the outlook for construction earnings has worsened.

The Stoxx Europe 600 Index decreased 0.4 percent to 340.97 at 12:07 p.m. in London, extending losses after a final reading showed euro-area economic confidence declined this month. The benchmark gauge retreated 1.8 percent last week as investors assessed the health of the euro-area economy and central-bank stimulus policies. Standard & Poor’s 500 Index futures lost 0.5 percent today, while the MSCI Asia Pacific Index slid 0.7 percent.

“The European economy keeps weakening, and the overall business climate is weighing on the market,” Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich, said by telephone. “The demonstrations in Hong Kong add to uncertainty.”

Economic confidence within the euro area diminished in September. An index of executive and consumer sentiment slipped to 99.9 from 100.6 in August, the European Commission in Brussels said today. That’s the lowest since November.

U.S. Data

Investors are also watching U.S. economic data for indications as to the timing of an increase in interest rates. Consumer spending climbed 0.4 percent last month after falling 0.1 percent in July, while gains in personal income accelerated, according to Bloomberg News surveys before today’s Commerce Department data at 8:30 a.m. Washington time.

A report from the National Association of Realtors at 10 a.m. may show a pending home-sales index slipped 0.5 percent in August following a 3.3 percent gain in July.

A gauge of bank-related stocks posted the biggest decline of the 19 industry groups in the Stoxx 600, losing 1.2 percent.

HSBC, which got 19 percent of its profit from Hong Kong in 2013, fell 1.9 percent to 637.9 pence. The London-based bank closed its branch in the Mong Kok district, which is one of the city’s most densely populated areas, after protests unexpectedly spread beyond the main island. Standard Chartered fell 1.8 percent to 1,153 pence after saying that operations were temporarily suspended at five branches.

Commerzbank Falls

Commerzbank slid 3.7 percent to 11.78 euros. The German lender seeking to resolve a probe into Iran sanctions violations also faces a U.S. inquiry into whether it broke anti-money-laundering laws, according to a person with knowledge of the situation.

Balfour Beatty tumbled 20 percent to 180 pence. Britain’s biggest builder said U.K. construction-services profit will fall by an additional 75 million pounds ($121 million) this year. That brings the estimated drop at the unit to 140 million pounds. While earnings at the rest of the company remain in line with expectations, Balfour didn’t comment on its overall forecast. The builder also said Chairman and interim Chief Executive Officer Steve Marshall plans to leave once successors to both his posts have been found.

RWE AG dropped 2.7 percent to 30.63 euros. Germany’s largest power producer said a plan to sell its RWE Dea oil and gas unit to Russian tycoon Mikhail Fridman’s LetterOne investment group has been delayed as a U.K. regulator has yet to approve the deal.

UBS AG advanced 0.8 percent to 16.83 Swiss francs after Switzerland’s largest bank said profit for July and August is already ahead of estimates for the full third quarter. Earnings in the two months totaled 731 million francs ($767 million). That is ahead of the 713 million-franc third-quarter net income average estimate of five analysts surveyed by Bloomberg.