European stocks fell for a second day, with the benchmark index posting its biggest weekly drop in almost a month, as investors speculated that equity gains have overshot the earnings outlook.

The Stoxx Europe 600 Index fell 1.4 percent to 328.69 at 4:30 p.m. London. The benchmark gauge posted a weekly retreat of 3.1 percent, its biggest since March 14, amid a selloff in shares with higher-than-average valuations.

Markets seem to be on the back foot this week,” said Espen Furnes, who helps manage about $75 billion at Storebrand Asset Management in Oslo. “Not only are we seeing more volatility, we’re also seeing a certain sector rotation, specifically out of the higher-priced sectors like IT and consumer cyclicals. This could be a signal that investors are becoming more sensitive.”

National benchmark indexes tumbled in all western-European markets.

FTSE 100 6,561.7 -80.27 -1.21% CAC 40 4,365.86 -47.63 -1.08% DAX 9,315.29 -139.25 -1.47%

ARM dropped 4.6 percent to 958 pence and Infineon Technologies AG lost 2.9 percent to 8.14 euros. A gauge of technology stocks posted the second worst performance among the 19 industry groups in the Stoxx 600.

Thales fell 3.8 percent to 46.03 euros. JPMorgan Chase downgraded the French defense-electronics maker to neutral from overweight, meaning investors may no longer buy the stock. The company’s forecasts for sales and cost reduction through 2017-18 are weaker than estimated, the brokerage said.

Mediaset Espana, trading after an hour’s suspension in Madrid, lost 4.9 percent to 7.99 euros. Credit Suisse Group AG sold a 3.7 percent stake in the company for 8.08 euros a share on behalf of Promotora de Informaciones SA.

Firstgroup Plc dropped 3.3 percent to 125 pence after Nomura Holdings Inc. downgraded the bus-and-rail operator to neutral from buy, saying that increased costs and poor weather in the U.S. in the first quarter will hurt earnings.

Givaudan SA declined 2.4 percent to 1,371 Swiss francs. Comparable sales at its flavor division rose 5.8 percent in the first quarter, the world’s biggest maker of flavoring products said. That missed the 6.5 percent increase estimated by analysts. Total comparable sales increased 5.7 percent for the quarter, exceeding the 5.6 percent average analyst forecast.

Bauer AG tumbled 5.1 percent to 18.67 euros, the biggest loss since October. The builder and construction-equipment maker posted a 2013 net loss of 19.4 million euros, compared with a profit of 25.8 million euros a year earlier. The company won’t propose a dividend and is negotiating a syndicated loan with bankers as it could not meet some debt covenants, according to a statement.

Salzgitter advanced 1.5 percent to 30.89 euros after Citigroup upgraded the shares to buy from neutral, saying the German steelmaker will benefit from any increase in construction-related demand in Europe.