Europe Stocks Fall With Russia, Commodites; Bonds Advance

Bloomberg: European stocks fell and Russian equities declined for a sixth day amid mounting international condemnation of President Vladimir Putin after the downing of a passenger jet in Ukraine. Commodities dropped to the lowest since February and Spanish and Italian bonds rose.

The Stoxx Europe 600 Index (BCOM)slipped 0.4 percent by 7:24 a.m. in New York. Futures on the Standard & Poor’s 500 Index (SPX) dropped 0.2 percent while the largest currency markets were little changed. Russian stocks headed for the longest slump since January. Yields on Spanish and Italian two- and five-year bonds fell to record lows. The Bloomberg Commodity Index of 22 raw materials declined 0.2 percent, and U.K. natural gas fell.

European Union foreign ministers meeting in Brussels tomorrow will consider tougher sanctions on Russian individuals and companies as world leaders pressure Putin to do more to end the violence which led to the deaths of 298 people on Malaysian Airlines flight MH17. Diplomatic efforts to end two weeks of Gaza Strip fighting intensified, with U.S. Secretary of State John Kerry duke to arrive in Egypt today for talks.

“The conflict in Gaza, the Ukraine crisis -- these are the main topics,” Soeren Steinert, who helps manage about $24 billion as associate director for equities trading at Quoniam Asset Management GmbH in Frankfurt, said by phone. “I can’t see any panic selling. It is only just that people are not willing to buy.”

Europe Equities

The Stoxx 600 dropped today after last week’s 0.8 percent gain. Travel and leisure stocks were some of the biggest losers among 19 industry groups in the gauge today, while the volume of shares listed on the Stoxx 600 changing hands was 31 percent lower than the 30-day average, data compiled by Bloomberg show.

Air France-KLM Group (AF), Europe’s biggest airline, declined 3 percent as tour operator TUI AG fell 2.6 percent and hotelier Accor SA retreated 1.3 percent. Commerzbank AG dropped 1.8 percent after a report that Germany’s financial-markets regulator found high operational risks at the country’s second-biggest lender.

Julius Baer Group Ltd. jumped 6.3 percent after Switzerland’s third-largest wealth manager said first-half profit rose 56 percent and announced an agreement to purchase European operations from Bank Leumi Le-Israel BM.

Sky Deutschland AG (SKYD) rallied 3.1 percent after people familiar with the matter said Rupert Murdoch’s 21st Century Fox Inc. may sell its 57 percent stake in the broadcaster to British Sky Broadcasting Group Plc in the next two weeks. BSkyB fell 2 percent.

Russia Falls

Russia’s Micex Index (INDEXCF) of stocks slid 1.7 percent to a two-month low. The nation’s February 2027 ruble bonds declined, lifting the yield 12 basis points to 9.16 percent, the highest since May 7. The ruble was little changed against the dollar.

The cost of insuring against losses on Russian sovereign debt rose to the highest since May, with credit-default swaps climbing eight basis points to 216 basis points, according CMA. That compares with 166.5 basis points on July 9.

Russian President Putin said the Malaysian airline disaster shouldn’t be used for political purposes. He again blamed the downing of the plane on the Ukraine conflict and said that international investigators, whose probe of the crash site has been hampered by armed, pro-Russian separatists, should have full access to the wreckage.

Russia will “do everything it can” to seek a negotiated settlement of the Ukraine conflict, he said in video posted on the Kremlin’s website.

Earnings Season

Futures on the S&P 500 expiring in September dropped today after the index advanced 0.5 percent last week. It closed 0.4 percent away from the record reached this month.

Halliburton Co., Netflix Inc. and Chipotle Mexican Grill Inc. are among S&P 500 companies reporting earnings today. About 77 percent of those that have posted results this earnings season have beaten analysts’ estimate for profit, while 70 percent exceeded sales projections, according to data compiled by Bloomberg.

Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

The MSCI All-Country World Index slipped less than 0.1 percent today following last week’s 0.5 percent increase. The MSCI AC Asia Pacific Index (MXAP) gained 0.1 percent after rising 0.5 percent last week.

Stocks in Dubai (DFMGI) rose 2.5 percent, after the DFM General Index tumbled 6 percent yesterday in the biggest fall since June 24.

Indonesia Vote

Indonesia’s rupiah strengthened 0.4 percent versus the dollar, while the Jakarta Composite Index added 0.7 percent on speculation Joko Widodo will be confirmed as Indonesia’s next president. The election commission is set to release the results by tomorrow.

India’s S&P BSE Sensex advanced for a fifth day, rising 0.3 percent. Thailand’s baht climbed to a seven-month high. Exports rose 7.2 percent last month from a year earlier, Junta leader Prayuth Chan-Ocha said in a July 18 television address.

The Shanghai Composite Index dropped 0.2 percent and the Hang Seng China Enterprises Index of mainland shares listed in Hong Kong lost 0.8 percent.

The yield on Spanish five-year securities dropped five basis points to 1.13 percent, the lowest since Bloomberg started tracking the data in 1993. Both Spain’s and Italy’s five-year securities rose for the seventh-successive day.

Portugal’s two-year notes also rallied, pushing the yield eight basis points lower to 0.82 percent.

The yield on 10-year Treasury notes at 2.48 percent and the euro trading at $1.3527. South Korea’s won rose the most and the Norwegian krone fell by the greatest amount against the dollar among its 16 major peers.

The Bloomberg Commodity Index fell as much as 0.4 percent to the lowest since Feb. 11. U.K. natural gas retreated 1.4 percent after declining 4 percent on July 18, according to broker data on Bloomberg. Gold climbed 0.3 percent. U.S. corn slipped as much as 1.5 percent to the lowest since July 2010.

West Texas Intermediate crude oil slipped 0.2 percent to $102.90 a barrel and Brent crude slid 0.2 percent to $107.01.

reporters on this story: Nick Gentle in Hong Kong