European stocks declined, reversing earlier gains, as an opinion poll in Italy showed the anti- austerity campaign of Silvio Berlusconi has boosted the former premier’s popularity before this month’s elections.
UniCredit SpA and Intesa Sanpaolo SpA led a drop in Italian shares. Vinci SA, Europe’s biggest builder, slid 4 percent after posting a decline in 2012 profitability. ArcelorMittal climbed 1.7 percent. Volvo AB jumped 3.8 percent even after fourth- quarter profit fell as the company predicted its North American and European markets will improve this year.
The Stoxx 600 fell 0.7 percent to 283.46 at 2:36 p.m. in London, after earlier rising as much as 0.4 percent. The equity benchmark has still gained 1.4 percent this year as U.S. lawmakers agreed on a budget deal and data signaled the world’s largest economy is recovering.
“Why is Berlusconi gaining in the polls? It is because he has a populist campaign that goes completely against” Prime Minister Mario Monti’s policies, said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris. “It’s a very, very negative signal vis-a-vis Germany. It’s legitimate to see the market falling.”
Berlusconi narrowed the lead of front-runner Pier Luigi Bersani to 0.3 percentage points, the poll by Tecne institute for SkyTG24 showed. That is lower than the survey’s margin of error of 4 percentage points.
Berlusconi has gained in popularity before the Feb. 24-25 elections as he promised to cut taxes and end a levy on first homes implemented by Monti’s government. Monti has accused Berlusconi of trying to buy votes.
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