Europe Stocks Pare Declines While Italy, Spain Bonds Fall

Frankfurt (May 19)   European stocks and U.S. equity-index futures pared losses while Italian and Spanish bonds slid. Indian shares climbed to a record as oil and nickel led commodities higher.

The Stoxx Europe 600 Index lost 0.2 percent at 8 a.m. in New York after sliding as much as 0.9 percent. AstraZeneca Plc tumbled 11 percent after rejecting Pfizer Inc.’s takeover bid. Standard & Poor’s 500 Index futures dropped 0.1 percent, after falling 0.5 percent. Italy’s 10-year yield increased eight basis points to 3.15 percent. India’s S&P BSE Sensex jumped 1 percent, extending last week’s 4.9 percent advance. Nickel climbed 3.9 percent and West Texas Intermediate crude rose 0.7 percent.

AstraZeneca rejected Pfizer’s sweetened 69.4 billion-pound ($117 billion) offer as too low, saying the bid fails to reflect the drugmaker’s pipeline. Indian shares climbed last week the most since 2011 and the rupee strengthened as elections showed Narendra Modi’s opposition bloc secured the largest victory in 30 years, boosting speculation the nation’s incoming government will take steps to revive the economy.

“Risk sentiment around European assets is increasingly sending warnings signs,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “Earnings have been coming in mixed. Valuation aspects are also a part of the tendency towards risk aversion.”

The Stoxx 600 fell today after climbing for five straight weeks, the longest run of gains since November, and leaving it trading at 14.4 times estimated 12-month earnings, compared with a five-year average of 11.6, the data show.