Falling oil
prices and investors' concern over Greece’s membership of the single-currency union outweighed speculation of increased European
Central Bank incentive pushing European stocks down on Monday.
The Stoxx Europe 600 Index dipped 0.4 percent to 340.04 at
11:40 a.m. in London, after earlier rising as much as 0.5
percent. A gauge of energy companies, including Total SA and BP Plc,
declined the most of the 19 industry groups on the Stoxx 600
after oil fell for a third day.
Greece’s ASE Index extended declines to slide 4 percent after a December tumble caused by Prime Minister Antonis Samaras’s failure to get enough backing for his presidential candidate prompted snap parliamentary elections to be called for this month.
“Once again it’s likely we’ll have some more euro-area
suspense in the weeks that remain before the Greek elections,”
said Arno Endres, the Luzern, Switzerland-based head analyst at
Luzerner Kantonalbank.
“German politicians are speaking up about a Greek exit from the euro and that gives rise to fears that a crisis may return. However, it seems that the market deems the risk of a spillover as unlikely, as the situation in other former crisis countries, such as Ireland, Portugal and Spain has improved.”
Chancellor Angela Merkel is ready to accept a Greek euro exit as the Mediterranean nation gears up for elections in three weeks, as Germany’s Der Spiegel magazine reported.
Samaras said Greece would be driven into default and out of
the 19-nation European single currency by the policies of
Syriza, the opposition party that is leading polls on promises
to raise wages, increase government jobs and persuade the euro
area to write off some Greek debt.
Greek lenders posted the biggest losses on the Stoxx 600. Piraeus Bank SA slumped 5 percent, National Bank of Greece SA dropped 6.1 percent, Alpha Bank AE lost 5.7 percent and Eurobank Ergasias SA declined 6.4 percent.
This week investors will be watching data that are forecast to show consumer prices in Europe fell for the first time in five years last month, adding to the argument for ECB President Mario Draghi to extend stimulus measures with quantitative easing.
Crude extended its drop from the lowest close since 2009 after Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, said it will boost exports this month.
Sanford C. Bernstein cut its Brent forecasts for this year, citing increases in global spare capacity and rising inventories.
