European stocks decline during first minutes of trading, after the Stoxx Europe 600 Index rose last week wrapping up the longest winning streak in 15 months, as China committed to carry out the broadest plan for economic reform at least since 1990 which boosted Asian shares.
The Stoxx 600 lost 0.2% to 322.22 at 9:40 a.m. in London. The benchmark index rose for six straight weeks as signs suggested the Federal Reserve won’t to reduce the pace of its stimulus this year, outweighing data that showed the euro-area economic recovery is faltering. The MSCI Asia Pacific Index gained 1.1%.
“China has been a focal point today as details from its third plenum have finally emerged,” Stan Shamu, a market strategist at IG Ltd., wrote in an e-mail for Bloomberg. “Looking ahead to the European open, the major bourses are facing a flat start with a relatively quiet session on the economic calendar. Something to look out for going forward will be how the recent rate cut will affect sentiment indicators.”
China announcement pointed to a broad restructuring of the economy, saying that the government would open the financial sector and relax restrictions on investment. In addition, the government pledged to improve the countrys initial public offering system to adopt a more market-oriented approach where companies can list according to their merits.
In corporate news, Lloyds, Britain’s biggest mortgage lender agreed to sell its Scottish Widows Investment division to Aberdeen for 560 million pounds ($903 million). The lender will receive a 9.9% stake in Scotland’s largest money manager, the companies said in a statement today. Aberdeen may pay a further 100 million pounds in cash over five years on a clause depending on the performance of partnership under which the fund manager will manage assets on behalf of the bank.
Sonova advanced 6.9% to 126.40 Swiss francs after predicting that annual earnings before interest, taxes and amortization would grow as much as 14%, compared with a previous forecast of 9% to 13%. Sales will increase 8 percent to 10%, up from an earlier projection of 6% to 8%.