European stocks dropped the most in more than a week as Portugal’s coalition government splintered and crude oil surged above $100 a barrel amid rising unrest in Egypt. Asian shares and U.S. index futures also declined.
Banco Espirito Santo SA and Banco Comercial Portugues SA both tumbled at least 12 percent as Portugal’s 10-year bond yield climbed above 8 percent for the first time since November. Air France-KLM Group led airlines lower, falling 3.9 percent, as oil rallied to a 14-month high.
The Stoxx Europe 600 Index (SXXP) lost 1.2 percent to 283.8 at 9:57 a.m. in London, extending the retreat from its 2013 high on May 22 to 8.6 percent. Portugal’s benchmark PSI-20 Index plunged 7 percent, the most since October 2008. The MSCI Asia Pacific Index slumped 1 percent and S&P 500 Index futures slid 0.6 percent, after the benchmark gauge closed lower yesterday.
“Confidence in the risk space is under threat from re-emerging Portugal issues,” Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne, wrote in an e-mail. “Tension in Egypt is also causing oil prices to spike and this is generally negative for equities.”
The Stoxx 600 (SXXP) slid 0.4 percent yesterday after a report showed U.K. construction expanded less than forecast. Asian stocks fell today as China’s services-industry growth slowed in June. Data from the ADP Research Institute at 8:15 a.m. New York time may show U.S. companies hired more workers last month.