European Stocks Decline as Bank Shares Slide With Bond Yields

(Bloomberg) -- European stocks extended their decline into a fourth day as bank shares tracked bond yields lower.

The Stoxx Europe 600 Index slid 0.2 percent at the close. Lenders led losses and the euro fell after dovish comments by European Central Bank President Mario Draghi damped speculation that he will give clues about tapering at the next meeting. A report that showed euro-area economic confidence fell for the first time this year also weighed on sentiment.

A rally in European equities has slowed this month, while the FTSE 100 Index is outperforming, buoyed in part by a renewed fall in the pound.

• U.K. stocks represent a defensive market with high dividend yield, and should perform better against the backdrop of potential softening in activity indicators and range-bound bond yields, JPMorgan Chase & Co. strategists wrote in a note, upgrading the equities to neutral from underweight.
• British Airways owner IAG SA fell 1.4 percent, the most in more than two weeks, as the U.K. market reopened after a holiday weekend. The airline is recovering from a technology failure that disrupted hundreds of flights over the long weekend.
• Akzo Nobel NV dropped 1.8 percent after an Amsterdam court rejected activist shareholder Elliott Management Corp.'s bid to oust Akzo's chairman, strengthening the Dutch paintmaker's hand in rebuffing takeover talks with a U.S. suitor.

--With assistance from Elena Popina

To contact the reporter on this story: Blaise Robinson in Paris at brobinson58@bloomberg.net.

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Namitha Jagadeesh, Richard Richtmyer