European and Asian Stocks Retreat on Rising Russia-Ukraine Worries

LONDON ( The Deal) -- European and Asian markets fell Wednesday, as a buildup of Russian forces near the Ukraine border sparked fears of an invasion. An unexpected decline in German factory orders also worries investors.

In London, the FTSE 100 was down 1.11% at 6,608.63, while in Germany the DAX shed 1.65% to 9,037.91. In France, the CAC 40 lost 1.26% to 4,179.72.

News that Russia has amassed 20,000 combat-ready troops -- reportedly special forces as well as troops with armor, artillery and air defense capabilities -- on its eastern border with Ukraine raised concerns about imminent military intervention. Russian President Vladimir Putin also ordered his government to retaliate against U.S. and European sanctions, albeit without harming Russian consumers.

Geopolitical concerns are also weighing on factory orders in Europe's largest economy.

A report by Germany's Federal Statistics Office released Wednesday showed that factory orders fell 3.2% in June, after dropping 1.6% in May. The 3.2% drop was the greatest in two and a half years, and surprised economists surveyed by Bloomberg News who had forecast a 0.9% increase.

Berlin's Economics Ministry blamed the decline on geopolitical developments and risks, which it said led to "certain holding back" on orders. It predicted a "moderate" industrial economic development in the coming months.

Disappointing corporate earnings also weighed on individual stocks.

In Zurich, reinsurer Swiss Re fell 2.96% to 74.85 Swiss francs, after posting second-quarter earnings that fell far short of expectations. Group net income rose to $802 million from $786 million, with net income at the life and health unit dropping to $48 million from $154 million a year ago.

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