Stocks in Europe, Asia Decline; MSCI World Falls for 11th Day

By Adria Cimino


Feb. 24 (Bloomberg) -- Stocks in Europe and Asia retreated, sending the MSCI World Index lower for the 11th straight day, as the deepening recession erodes earnings and forces companies to sell shares. U.S. index futures advanced.

TomTom NV, Europe’s largest maker of car-navigation devices, tumbled for a ninth day after reporting a fourth-quarter loss. Novartis AG, Switzerland’s second-biggest drugmaker, dropped 1.5 percent as Chief Executive Officer Daniel Vasella said pressure on drug prices will grow this year. Nomura Holdings Inc., Japan’s largest brokerage, slumped 9.3 percent on its plan to sell shares after four quarterly losses.

The MSCI World Index slid 0.7 percent to 752.22 at 9:43 a.m. in London. The gauge of 23 developed countries dropped 14 percent in the past 11 days as companies from Anglo American Plc to Cie. De Saint-Gobain SA indicated the recession is worsening, overshadowing the U.S. government’s pledge to give more capital to banks.

“This is turning out to be one of the worst bear markets in the past 100 years,” Bob Parker, who helps oversee $600 billion as vice chairman of Credit Suisse Asset Management, said in a Bloomberg Television interview in London. “The question we have to ask is: what are the catalysts for creating a base and what are the catalysts for an eventual rally.”

U.S. futures rebounded after the Standard & Poor’s 500 Index sank 3.5 percent yesterday to the lowest since 1997. Futures on the S&P 500 added 0.5 percent with the benchmark index for U.S. equities valued at the cheapest level relative to earnings since 1985.

Europe’s Dow Jones Stoxx 600 Index slid for a third day, losing 2 percent as Basilea Pharmaceutica AG tumbled. The MSCI Asia Pacific Index fell 1.6 percent to 75.03, poised for the lowest close since August 2003.

$1.1 Trillion

The MSCI World has retreated 53 percent since the start of last year as credit-related losses at financial firms worldwide climbed to $1.1 trillion and Europe, the U.S. and Japan fell into the first simultaneous recessions since World War II.

German business confidence declined in February to the lowest in at least 18 years on concern the government’s stimulus program and interest-rate cuts from the European Central Bank won’t be enough to revive the economy, data from the Ifo institute showed today.

Confidence among U.S. consumers probably dropped in February to the lowest level on record, signaling spending will slump further as unemployment climbs, economists said before a report today. Separate data may show the decline in home values accelerated in December.

TomTom Retreats

TomTom slid 8.7 percent to 2.98 euros after reporting a loss on a writedown of the value of its mapmaking unit Tele Atlas. The company’s room in its loan covenants is “not tremendously big,” Chief Executive Officer Harold Goddijn said in a telephone interview today.

Novartis slipped 1.5 percent to 47.22 Swiss francs. Basilea Pharmaceutica fell 36 percent to 70.95 francs, the biggest drop in the Stoxx 600. The Swiss developer of anti-infection drugs reported a full-year loss and said its Ceftobiprole drug used to treat skin infections is being delayed in Europe.

Georg Fischer AG sank 6.8 percent to 150 francs. Europe’s largest maker of iron castings for cars said full-year profit fell 72 percent to 69 million francs ($59 million) as demand from the automotive industry collapsed.

Profits have declined 82 percent for 174 companies in the Stoxx 600 that released results since Jan. 12, data compiled by Bloomberg show.

‘Weighing on Sentiment’

“There’s discouragement about the market,” Chicuong Dang, an analyst at KBL Richelieu Gestion in Paris, which oversees $5.1 billion in assets, said in a Bloomberg Television interview. “Bad earnings results are weighing on sentiment, which is clearly low.”

Nomura slumped 9.3 percent to 420 yen. The company will sell shares valued at as much as 291.2 billion yen ($3.1 billion) to replenish capital eroded by four-straight quarterly losses, according to filings to the Ministry of Finance yesterday.

Bayerische Motoren Werke AG retreated 4.6 percent to 19.22 euros. The world’s largest maker of luxury cars was cut to “underweight” from “overweight” at Morgan Stanley, which said sales may fall by one-third by 2010.

Norsk Hydro ASA dropped 4.2 percent to 21.9 kroner. The world’s fifth-largest aluminum producer was cut to “underweight” from “overweight” at JPMorgan, which said demand for the metal “remains weak and prices are under pressure.”

KBC Group NV slid 5.9 percent to 8.28 euros. Belgium’s biggest bank and insurer by market value was cut by Deutsche Bank AG to “sell” from “hold.”

Vestas Wind Systems A/S slipped 4.8 percent to 267.50 kroner. Shares of the largest wind-turbine maker were cut to “underweight” from “neutral” at JPMorgan, which cited “risks to near-term and long-term industry profitability.”