European stocks retreat after their biggest gain in a month

On Wednesday European stocks retreated after their biggest gain in a month, with earnings reports taking a back seat as investors await tomorrow’s European Central Bank meeting for possible updates on the direction of monetary policy.

The Stoxx Europe 600 Index fell 0.3 percent to 341.59 at 10:53 a.m. in London, with so-called “bondproxy” sectors including real estate and telecommunications, which lag the market when expectations of higher bond yields rise, among the worst performers. Miners and banks led a broad-based rally yesterday on optimism monetary policy will remain supportive of growth.

The ECB’s Governing Council concludes a two-day policy meeting on Thursday and as credit data point to a deceleration of the region’s economic recovery, investors will seek indications of whether the central bank is prepared to take further steps to augment its stimulus program.

After reaching a four-month high in September, European equities failed to continue the advance on speculation central banks across the globe may tighten monetary policy. The Stoxx 600 hasn’t posted back-toback gains in more than two weeks, and has traded in a range of 18 points since mid-July.

Asian stocks rose for a second day after data out of China showed Asia’s largest economy remained stable in the third quarter and speculation grew the Federal Reserve will stick to a gradual tightening of monetary policy. The MSCI Asia Pacific Index added 0.3 percent to 139.82 as of 4:10 p.m. in Hong Kong, trimming a gain of as much as 0.4 percent after the Chinese figures were broadly in line with expectations. Asian shares were already higher ahead of the much-anticipated Chinese numbers after a gauge of global equities jumped the most in almost four weeks on Tuesday amid mounting speculation that the Federal Reserve will boost interest rates in December then not rush further increases as the U.S. economy remains mixed.