Global stocks drop on Ger­man out­put report


Euro­pean stocks dropped for the fourth day in five as a report showed Ger­man man­u­fac­tur­ing un­ex­pect­edly con­tracted this month, while Cyprus's Pres­i­dent worked on a new plan to ob­tain a bailout from the euro area. U.S. in­dex fu­tures were lit­tle changed, while Asian shares rose.

Lanxess AG slid the most in eight months af­ter pre­dict­ing lower first-quar­ter earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion than in the pre­vi­ous year.

The Stoxx 600 lost 0.5 per­cent to 295.2 at 8:37 a.m. in Lon­don. The eq­uity bench­mark has still risen 5.6 per­cent this year as re­ports on U.S. pay­rolls and Chi­nese ex­ports bol­stered con­fi­dence in the global eco­nomic re­cov­ery and cen­tral banks con­tin­ued their stim­u­lus mea­sures. Stan­dard & Poor's 500 In­dex fu­tures de­creased 0.1 per­cent to­day, while the MSCI Asia Pa­cific In­dex gained 0.2 per­cent.

"In­vestors have come back a bit on Cyprus and the im­me­di­ate im­pact it may have on the broader euro zone and have con­cluded that Cyprus alone isn't enough to re-ig­nite a cri­sis," Norman Vil­lamin, who helps over­see $64 bil­lion as Euro­pean chief in­vest­ment of­fi­cer at Coutts & Co. in Zurich, said. "But we look at the tools and the ap­proach be­ing taken and think it's really mak­ing any fu­ture prob­lems much more risky for euro-zone pol­icy mak­ers to han­dle."

A pur­chas­ing man­agers' in­dex for Ger­many's man­u­fac­tur­ing in­dus­try un­ex­pect­edly fell to 48.9 this month. The me­dian econ­o­mist forecast had called for a read­ing of 50.5, ac­cord­ing to a Bloomberg News sur­vey.

Pres­i­dent Ni­cos Anas­tasi­ades met ad­vis­ers to draft a new plan to stave off fi­nan­cial col­lapse af­ter law­mak­ers re­jected the euro area's pro­posed levy on bank de­posits.

The alternative plan may in­clude a new ver­sion of the de­posit tax, ac­cord­ing to an of­fi­cial who asked not to be iden­ti­fied cit­ing government pol­icy. The cen­tral bank de­clared that lenders will re­main shut for an­other two days, ef­fec­tively prevent­ing Cypri­ots from ac­cess­ing their ac­counts un­til March 26 when they re­open af­ter a na­tional hol­i­day on March 25.

The Euro­pean Cen­tral Bank will prob­a­bly de­lay its de­ci­sion on whether to keep sup­ply­ing Cypriot banks with emer­gency funds, two peo­ple fa­mil­iar with the de­lib­er­a­tions said yes­ter­day. The ECB may wait to find out whether Cyprus gets a bailout, the peo­ple said.

In China, a report showed that man­u­fac­tur­ing ex­panded at a faster pace this month than econ­o­mists had forecast. The pre­lim­i­nary read­ing of HSBC Hold­ings Plc and Markit Eco­nom­ics' pur­chas­ing man­agers' in­dex was 51.7. That com­pared with the 50.4 fi­nal read­ing for Fe­bru­ary and Jan­uary's 52.3. A read­ing above 50 means that ac­tiv­ity in­creased. In the U.S., Fed­eral Re­serve Chair­man Ben S. Ber­nanke said that the cen­tral bank will al­ter its monthly bond pur­chases in re­sponse to changes in the jobs mar­ket.

A report at 10 a.m. in Washington may show that sales of pre­vi­ously owned houses rose to the high­est level in more than three years. Pur­chases of ex­ist­ing prop­er­ties in­creased to a five mil­lion an­nual rate in Fe­bru­ary, the most since Novem­ber 2009, ac­cord­ing to the me­dian forecast of 77 econ­o­mists in a Bloomberg sur­vey. Other data may show an in­dex of lead­ing eco­nomic in­di­ca­tors ad­vanced for a third con­sec­u­tive month.

Lanxess slumped 6.3 per­cent to 58.09 eu­ros af­ter pre­dict­ing that Ebitda will drop to as lit­tle as 160 mil­lion eu­ros ($207 mil­lion) in the cur­rent quar­ter.

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