European stocks declined the most in more than a month as the shutdown of the U.S. federal government entered its second day.

The Stoxx Europe 600 Index slipped 0.7 percent to 310.79 at the close in London, its biggest slide since Aug. 30.

European Central Bank policy makers meeting in Paris left their benchmark interest rate unchanged at a record low of 0.5 percent. That matched the forecasts of all 52 economists surveyed by Bloomberg News. ECB President Mario Draghi refrained from saying that the euro area needs further help from the central bank to support its economic recovery.

National benchmark indexes retreated in 12 of the 18 western-European markets. The U.K.’s FTSE 100 fell 0.4 percent, Germany’s DAX lost 0.7 percent and France’s CAC 40 Index retreated 0.9 percent.

Italy’s FTSE MIB added 0.7 percent as Prime Minister Enrico Letta won a confidence vote in parliament. During a debate before the vote, Berlusconi said that he would support Letta. The former premier had withdrawn the People of Liberty’s five ministers from the cabinet on Sept. 28, prompting Letta to call today’s vote in an attempt to rebuild a parliamentary majority.

Hochtief slid 7.9 percent to 60.20 euros after the Sydney Morning Herald reported allegations of corruption at its Australian construction unit Leighton Holdings Ltd. The newspaper cited internal company files. Hochtief spokesman Christian Gerhardus declined to comment to Bloomberg News on the Australian newspaper’s report.

KappAhl slumped 9.8 percent to 38.80 kronor after it proposed paying no dividend. The company also announced fiscal fourth-quarter net income of 7 million kronor ($1.1 million).

Portugal’s PSI 20 Index (PSI20) gained 0.9 percent as Portugal Telecom, which accounts for 11 percent of the benchmark measure, surged 6.5 percent to 3.62 euros. The country’s largest phone company said that the merger will generate additional revenue and savings from cost cutting totaling 1.8 billion euros ($2.5 billion). “The merger will consolidate the position of both companies as the leading operator for Portuguese-speaking countries,” Portugal Telecom said in a statement.

Banco Espirito Santo SA jumped 4 percent to 84 euro cents. The lender owns a 10 percent stake in Portugal Telecom, according to data compiled by Bloomberg.

Intesa Sanpaolo SpA, Italy’s second-biggest bank, jumped 4.7 percent to 1.69 euros. Societe Generale SA, France’s second-largest bank, gained 2.5 percent to 38.80 euros.

U.S. stock futures fell as a private jobs report showed companies added fewer jobs than forecast and the government shutdown entered a second day.

Global Stocks:

Nikkei 14,170.49 -314.23 -2.17%

Hang Seng 22,984.48 +124.62 +0.55%

FTSE  6,411.89 -48.12 -0.74%

CAC  4,162.8 -33.80 -0.81%

DAX 8,638.01 -51.13 -0.59%

Crude oil $102.04 0.00%

Gold $1301.70 +1.21%

Upgrades:

Downgrades:

Alcoa (AA) downgraded to Sell from Hold at Deutsche Bank

Other:

Boeing (BA) reiterated with Buy at CRT Capital, targed raised from $123 to $142

European stocks declined, after yesterday rallying the most in three weeks, as retailers fell and investors awaited the outcome of a European Central Bank meeting. U.S. index futures and Asian shares also retreated as the U.S. government entered the second day of its shutdown.

The Stoxx Europe 600 Index slipped 0.7 percent to 310.61 at 9:11 a.m. in London. The equity benchmark jumped 0.8 percent yesterday as a senior minister in Silvio Berlusconi’s People of Liberty party said that lawmakers should vote for the incumbent prime minister in today’s confidence vote. Standard & Poor’s 500 Index futures also decreased 0.7 percent today, while the MSCI Asia Pacific Index fell 0.3 percent.

European Central Bank policy makers meeting in Paris today will keep their benchmark interest rate unchanged at a record low of 0.5 percent, according to economists.

The ECB will decide against pumping more cash into the currency zone’s financial system as long as the threat of action keeps market interest rates under control, according to economists from Berenberg Bank to Nomura Holdings Inc. While Draghi put investors on notice last week that a further long-term refinancing operation remains possible, other policy makers have played down the likelihood of that for now.

In Italy, Prime Minister Enrico Letta may win a confidence vote today after deputy premier Angelino Alfano said that lawmakers from People of Liberty will support the coalition government. Berlusconi prompted the vote when he withdrew his party’s ministers, including Alfano, from the cabinet on Sept. 28. The front-page headline of the Berlusconi-owned Il Giornale this morning read “Alfano Traitor.”

The U.S. government began its first partial shutdown in 17 years yesterday as Republicans and Democrats failed to agree on a compromise budget to keep the federal government open into the new financial year. As many as 800,000 federal employees didn’t work and the government closed some services.

Tesco fell 4.1 percent to 344.3 pence after reporting that so-called trading profit dropped 7.6 percent to 1.59 billion pounds ($2.6 billion) in the first half of the financial year, Cheshunt, England-based Tesco said. That missed the 1.62 billion-pound median estimate of analysts. Operating profit in Europe slumped 68 percent.

J Sainsbury Plc lost 2.5 percent to 380.6 pence, following Tesco lower. The U.K.’s third-largest supermarket chain also reported that second-quarter same-store revenue, excluding fuel sales, increased 2 percent. Total sales climbed 5 percent.

KappAhl slumped 6.5 percent to 40.20 kronor after it proposed paying no dividend. The company also announced fiscal fourth-quarter net income of 7 million kronor ($1.1 million).

FTSE 100 6,409.52 -50.49 -0.78%

CAC 40 4,166.23 -30.37 -0.72%

DAX 8,644.15 -44.99 -0.52%

Asian stocks outside Japan rose as investors speculated economic effects would be limited from the first partial U.S. government shutdown in 17 years. Japanese shares fell.

Nikkei 225 14,170.49 -314.23 -2.17%

Hang Seng 22,999.22 +139.36 +0.61%

S&P/ASX 200 5,215.6 +8.80 +0.17%

Shanghai Composite 2,174.66 +14.64 +0.68%

Samsung Electronics Co. gained 2.6 percent in Seoul after the consumer-electronics maker said third-quarter earnings will improve at its mobile unit.

Paladin Energy Ltd. soared 10 percent in Sydney as the uranium explorer reported it is cutting costs.

Hutchison Whampoa, controlled by Li Ka-shing, added 3.2 percent on a report it may seek to raise $10 billion spinning off its Watsons retail arm.

Nissan Motor Co., a carmaker that gets about 80 percent of its revenue outside Japan, dropped 1 percent as the yen gained.

Nikkei 225 14,484.72 28,92 0,20%

Hang Seng 22,859.86 -347,18 -1,50%

S & P / ASX 200 5,206.8 -12,08 -0,23%

Shanghai Composite 2,174.66 14,64 0,68%

FTSE 100 6,460.01 -2.21 -0.03%

CAC 40 4,196.6 +53.16 +1.28%

DAX 8,689.14 +94.74 +1.10%

Dow 15,191.70 +62.03 +0.41%

Nasdaq 3,817.98 +46.50 +1.23%

S&P 500 1,695.00 +13.45 +0.80%