By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets stayed under
pressure on Wednesday as investors moved to cash in on recent
gains. A weak start for Wall Street and a costly Italian bond
auction didn't help sentiment.
ASM International NV, Commerzbank AG and Inditex SA were among
the biggest decliners, while Prudential PLC was among the
climbers.
The Stoxx Europe 600 index fell 0.1% to 295.03 after eking out a
gain of less than 0.1% in a lackluster session Tuesday after data
showed the U.K. slipping back into recession.
The index pared some losses after better-than-expected U.S.
retail sales data. Still, U.S. stocks opened lower which meant the
pressure on Europe stocks eased only slightly. Asia stocks also
finished weaker.
Banks were among the biggest decliners. Among those losing
ground, shares of Commerzbank AG fell more than 8% after the German
bank reportedly announced a EUR2.5 billion ($3.25 billion) capital
increase to repay the rest of the EUR16 billion in hybrid capital
it got from the German government over four years ago.
Another big mover, ASM International (ASMI), sank 13% after the
Dutch semiconductor firm said it would sell an 8% to 12% stake in
ASM Pacific Technology Ltd via a partial secondary share placement.
The company said it was making this move in order to address the
nonrecognition by markets of the value of the combined business of
the company.
Atif Latif, director of trading, equities and derivatives at
Guardian Stockbrokers, said Europe markets have seen some
profit-taking on Wednesday, given the decent rally seen over the
past few sessions. On a one-month basis so far, the Stoxx 600 is up
2.3%.
"We don't see this dip today as anything too concerning as
buyers are still re entering the market on weakness," Latif said in
emailed comments. "This is seen as healthy as money is flowing back
in and we continue European equity markets have moved lower along
with the Euro while yields in Europe's periphery are on the
increase."
Italian stocks were a big loser on Wednesday. Borrowing costs
rose in the country's first bond auction since the government's
credit rating was cut to BBB plus from A minus by Fitch Ratings
last week, which put some pressure on bond yields. The FTSE MIB
Italy index slid 1.5% to 15,784.06.
Shares of Enel fell more than 6% after the Italian utility
reportedly posted a drop in net income for 2012. But several
Italian banks were also down a chunk, with Unione di Banche
Italiane SCpA down more than 5%.
Another peripheral market under pressure was Spain. Heavyweight
retailer Inditex fell nearly 3% after the group reported a 22%
profit rise, but analysts were disappointed by fourth-quarter
sales, gross margin, cash generation, its dividend and
store-opening guidance.
The Spain IBEX 35 fell 0.9% to 8,458.70, making it one of the
worst-performing regional markets.
Data out of the euro zone was also not doing much for sentiment.
January industrial-production fell 0.4% on a monthly basis, a
steeper-than-expected decline and the fourth fall in five months,
said economists at Capital Economics.
"January's fall in euro-zone industrial production is a timely
reminder that, despite the improvement in business and financial
market sentiment, the region may have remained in recession in Q1,"
said Ben May, European economist in a note.
Sluggish manufacturing output data out of the U.K. on Tuesday
raised fears that economy is headed for a triple-dip recession and
weighed on the British pound. That helped the U.K. index some a day
prior, but it was backfooting Wednesday as investors sold off big
banks and resource stocks.
HSBC PLC (HBC) fell 1% and Standard Chartered PLC dropped nearly
2%.
Along with the banks, losses of 2% or more from miners such as
Rio Tinto PLC (RIO) and BHP Billiton PLC (BHP) dragged the FTSE 100
index close to a full percent lower to 6,455.08.
The German DAX 30 index kept its losses to a minimum, trading
flat at 7,958.85, despite the tumble for Commerzbank. Shares of
Deutsche Bank AG fell 1%, but losses were contained for some of its
heaviest weighted stocks.
Shares of Volkswagen AG fell 1% as autos fell across Europe on
Wednesday. Renault SA lost 1.6%. The French CAC 40 index fell 0.3%
to 3,830.17.
Shares of L'Oreal SA rose 1%, helping support the French
index.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires