By Sara Sjolin and Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stock markets traded with
broad-based losses on Friday, as continuing tensions in Ukraine and
worries about slowing economic growth in China hampered the
investing mood.
The Stoxx Europe 600 index dropped 0.8% to 322.07, setting it on
track for a 3.3% decline for the week, which would mark the biggest
weekly loss since late June last year.
The pan-European benchmark was weighed by a 7.4% drop for French
conglomerate Bouygues SA amid developments in the company's plan to
takeover Vivendi SA's (TICKER:FR:VIV) phone business. French
Industry Minister Arnaud Montebourg said the board of Vivendi
prefers cable operator Altice SA's bid to buy a controlling stake
in its SFR phone unit, rather than the offer from rival Bouygues.
Vivendi shares dropped 0.6%.
The losses dragged the French CAC 40 index down by 0.8% to
4,218.22, indicating the benchmark will close at its lowest level
since the end of January.
Meanwhile, the U.K.'s FTSE 100 index fell 0.4% to 6,528.56. But
Germany's DAX 30 index turned higher by 0.1% to reclaim the 9,000
level, aided by a 1.9% rise in shares of Fresenius SE & Co.
KGaA after the German healthgroup proposed a three-for-one stock
split.
The DAX, however, was still in line for a 3.4% weekly decline.
In the U.S., the S&P 500 index (SPX) and the Dow Jones
Industrial Average (DJI) each held to small gains Friday after a
March survey on consumer sentiment fell to its lowest reading since
November. However, U.S. stocks were also poised to fall for the
week..
Broader losses came as investors shunned riskier assets such as
equities ahead of Sunday's referendum in Ukraine that's likely to
see citizens of the Crimea region vote to return the Black Sea
peninsula to Russia. Violent clashes in the eastern Ukrainian city
of Donetsk overnight between pro-Russia and pro-Ukraine activists
reportedly left one person dead and several injured.
The Ukrainian government, the U.S. and the European Union
contend the referendum is illegal, and a vote in favor of rejoining
Russia would likely be followed by a round of U.S.- and
European-led sanctions against Moscow.
But that scenario is unlikely to cause long-lasting turmoil as
it's already priced into the markets, most analysts said. In
Friday's trade, however, Russian stocks tumbled ahead of the vote
with the MICEX Index down 1.7% at 1,228.19.
Meanwhile, lingering uncertainty about a slowdown in China's
economy also kept investors on edge. Data out earlier in the week
showing a surprisingly large drop in exports, coupled with
disappointing industrial-output numbers and retail sales out on
Thursday has triggered a wave of fresh concerns the world's
second-largest economy is heading for a hard landing.
Copper prices have been hit particularly hard by the concerns,
although prices rebounded slightly on Friday.
Mining firms, which are sensitive to growth in China as well as
the broader trading sentiment, dropped on Friday. Shares of
heavyweight Rio Tinto PLC (RIO) lost 0.7% and Glencore Xstrata PLC
(GLCNF) fell 2.4%.
Among other notable movers in Europe, shares of Pandora AS lost
3.1% after the Danish jewelry firm said shareholders had agreed to
sell 13 million existing shares to institutional investors.
Shares of Banca Monte dei Paschi di Siena SpA rose 3.5% after
Credit Suisse lifted the Italian bank to neutral from
underperform.
Iberdrola SA advanced 0.3% after Deutsche Bank lifted the
utility firm to buy from hold.
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