By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks fell Monday, as
investors extended last week's selloff, and as markets watched
escalating tensions between Ukraine and Russia.
The Stoxx Europe 600 index lost 0.6% to 326.74, adding to
Friday's fall of 1.4%. Last week, the Stoxx 600 fell 3.1%, the
first such decline since the week ended March 14.
Monday's decliners included PSA Peugeot Citroën , down 4.3%
after the French car maker outlined cost reductions and other
measures in an effort to return to profitability.
Also down was GlaxoSmithKline PLC , with shares off 1.1% after a
BBC "Panaroma" report that the British drug maker is facing a
criminal investigation in Poland for allegedly bribing doctors to
promote the company's Seretide asthma medication. GSK said in
statement that it disciplined an employee in 2011 over
"inappropriate communication" in its Polish program and that it
continues to investigate as it cooperates with Poland's
anti-corruption bureau.
European stocks were unable to capitalize on signals that the
European Central Bank is open to considering asset purchases to
keep long-term interest rates low. ECB executive board member
Benoit Coeure said Sunday that if further monetary accommodation is
needed, that "it is reasonable to consider other operations aimed
at lowering the term premium." Coeure's comments followed ECB
President Mario Draghi's speech on Saturday, during which he warned
again that a further rise in the euro could lead to additional
monetary easing.
"The message coming out from the meeting was that a cut in
interest rates is likely at first, possibly into negative
territory. Only after that would the ECB attempt a
quantitative-easing program," said Marshall Gittler, head of global
currency strategy at IronFX, in a note Monday. The euro (EURUSD)
fell against the U.S. dollar on the prospect of further easing
measures.
Stocks globally have been under pressure, largely stemming from
valuation concerns in so-called momentum shares on Wall Street,
where the tech-heavy Nasdaq Composite (RIXF) also slid 3.1% last
week.
Investors on Monday were monitoring developments in Ukraine and
Russia as pro-Russian activists in eastern Ukraine ignored a
Kiev-issued deadline to disarm. Ukraine said it will launch
military force against Russian separatists who have seized
Ukrainian government buildings. Ukraine's Interim President
Oleksandr Turchynov, meanwhile, said he wasn't opposed to the
activists' call for a nationwide referendum on regional
autonomy.
Russian stocks as tracked by the MICEX index pulled back 1.4% to
1,343.67, and the RTS benchmark lost 2% to 1,180,23.
In country-specific indexes, Germany's DAX 30 fell 0.6% to
9,259.81, building on last week's loss of 3.9%, and France's CAC 40
gave up 0.4% to 4,348.61.
The FTSE 100 declined 0.4% to 6,535.17, but Glencore Xstrata PLC
outperformed the broader market, rising 1.4% following the
company's $5.8 billion sale of Peruvian copper mine project to a
Chinese consortium.
In other movers, Banca Popolare di Milano tumbled 9% after
shareholders over the weekend rejected the board's
governance-reform proposal.
The trading week will be shortened by the Good Friday
holiday.
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