European stocks on Tuesday dropped the most in a month after Home Depot Inc. cut its profit forecast, copper prices retreated and the dollar fell to a record low against the euro.
“We maintain that the overhang in the U.S. housing market will keep pressure on spending throughout the second half of 2007, and the profit warning from Home Depot just confirms this,” said Jane Coffey, head of equities at Royal London Asset Management.
The Dow Jones Stoxx 600 index lost 1.1 percent, the biggest decline since June 7. The Stoxx 50 fell 1.2 percent and the Euro Stoxx 50, a measure for the euro region, decreased 1.2 percent. National benchmarks slid in all 18 Western European markets.
ASIAN STOCKS DROP: Asian stocks declined, led by exporters, after the yen strengthened and the Australian dollar traded near an 18-year high.
“We’re going to hear more about the currency issue, especially in the form of downgrades ahead of the next earnings season,” said Atul Lele at White Funds Management in Sydney. “It’s going to be an increasing factor on stocks from here.”
The Morgan Stanley Capital International Asia-Pacific index slipped 0.1 percent. Japan’s Nikkei 225 index slid .05 percent. Australia’s S&P/ASX 200 index fell 0.6 percent. Markets dropped elsewhere, except in Taiwan, Hong Kong, Indonesia and Thailand.
