LONDON (The Deal) -- European and Asian stocks retreated Tuesday as the U.K. government sold a 6% stake in Lloyds Banking Group in the country's largest privatization in a decade, and as investors awaited the start of a two-day Federal Reserve monetary policy meeting in the U.S.
The U.K. government sold just over 3.2 billion pounds ($5.1 billion) of Lloyds' shares to institutional investors, five years after the previous Labour government arranged for Lloyds to take over troubled peer HBOS. The state selldown is the largest British privatization since 1993, when the U.K. government raised $8.1 billion from the sale of British Telecommunications shares.
The U.K.'s benchmark FTSE fell 17.26 points, or 0.27%, to 6,604.90, as Lloyds shed 2.09% to 75.74 pence.
In Germany, a report by the ZEW Centre for European Economic Research showed investor confidence in Europe's largest economy rose for the second straight month and to its highest level since April 2010. The index, which seeks to predict economic developments six months in advance, rose to a higher than expected 49.6 in September from 42 in August. German Chancellor Angela Merkel, seeking her third term in national elections on Sunday, said last week that while the euro-area crisis is not yet over, she sees the "first small green shoots" of hope. Germany's benchmark Dax Index fell 10.42 points, or 0.12%, to 8,602.58. The biggest loser was tire maker Continental AG. Its shares fell €4.75, or 3.74%, to €122.30 after its biggest shareholder, closely held auto parts maker Schaeffler AG and its holding company, sold a 4% stake for about €950 million ($1.27 billion) to repay debt. The Hang Seng closed down 71.89, or 0.31%, to 23,180.52, while the Nikkei shed 93.00, or 0.65%, to 14,311.67. Standard & Poor's futures gained 9.61, or 0.57%, to 1,697.60, on the first day of a two-day meeting of the Federal Open Market Committee. --Written by Renee Cordes
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