KF, the world’s largest maker of ball bearings, dropped 7.6 percent. Renault SA (RNO) led a selloff in carmakers, tumbling 5.1 percent. Etablissements Maurel & Prom SA surged the most in 11 years amid takeover speculation.
The Stoxx Europe 600 Index (SXXP) dropped 0.8 percent to 241.41 at 2:06 p.m. in London, after earlier rising as much as 0.4 percent. The gauge yesterday climbed 0.6 as investors shrugged off a surge in Spanish borrowing costs. The Stoxx 600 is still down 11 percent from its high this year on March 16 on concern the region’s debt crisis is hurting global growth.
“The most interesting development for me has been the move higher in bund yields,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “Investors are clearly becoming concerned about Germany’s growing liabilities associated with the euro zone and suggests there is an element of tail risk being priced in.”
Germany sold 4.04 billion euros ($5.06 billion) of 10-year bunds today at an average yield of 1.52 percent, up from a rate of 1.47 percent at the last auction on May 16. Investors bid for 5.81 billion euros of the bunds, above the 5 billion-euro maximum sales target for the auction, the Bundesbank said.
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