European stocks declined as investors speculated that the unrest in Libya will cause energy prices to climb, fueling inflation and curbing economic growth. Eni SpA and OMV AG lost at least 4 percent amid speculation that the Libyan revolts will hinder the companies’ operations in the North African country. Merck KGaA advanced 4.5 percent as fourth-quarter earnings beat estimates. Alpha Bank SA soared 8.4 percent after the lender rejected an offer from National Bank of Greece SA. The Stoxx Europe 600 Index fell 0.6 percent to 289.44 at 2:03 p.m. in London. Even so, the gauge has advanced 4.9 percent since the start of 2011 as investors bet that a stronger economic recovery will boost corporate earnings. Rising profits have held the gauge at about 15 times the reported earnings of its companies, less than the average for the past year, according to data compiled by Bloomberg. The gauge reached its highest level since August 2008 on Feb. 17. “The political unrest in the Middle East appears to be getting worse and spreading to other countries,” said Gregor Smith, a fund manager at Daiwa Asset Management in London who helps oversee about $1 billion. “It could push up the oil price. It would obviously have a negative impact for inflation, and could cause economic growth to be weaker than expected.” Futures contracts on the Standard & Poor’s 500 Index expiring in March slid 0.3 percent today. U.S. financial markets are shut for a holiday. The MSCI Asia Pacific Index lost 0.1 percent. Fifty-six percent of the Stoxx 600 companies that have reported per-share profit since Jan. 10 have topped analysts’ estimates, according to data compiled by Bloomberg. German Business Confidence German business confidence unexpectedly rose to a record high in February as booming exports spurred hiring and consumer spending. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 111.2 this month from 110.3 in January. That’s the highest since records for a reunified Germany began in 1991. Economists had predicted the index would hold steady, according to the median of 38 forecasts in a Bloomberg News survey. Eni, the international oil company with the largest presence in Libya, dropped 4.3 percent to 17.58 euros in Milan as investors speculated that the government’s attacks on demonstrators will disrupt production in the North African country. OMV, which also operates in Libya, sank 5.3 percent to 32.19 euros. TNT NV lost 1.4 percent to 20.17 euros as full-year net income missed analysts’ estimates. CSR, JJB Sports Fall CSR Plc slumped 8.2 percent to 398.4 pence after the London-based wireless-technology producer said it will buy Zoran Corp. of the U.S., which specializes in imaging technology, for $679 million. CSR will return as much as $240 million to investors in a share buyback program. JJB Sports Plc, the unprofitable U.K. sporting goods retailer, sank 15 percent to 32.3 pence after raising 31.5 million pounds ($51.1 million) in a share sale. Merck advanced 4.5 percent to 65.50 euros after the drugmaker reported core earnings, excluding costs such as writedowns and merger expenses, of 1.78 euros a share, beating the average estimate of 1.49 euros from 16 analysts surveyed within the past 28 days by Bloomberg. Merck said fourth-quarter profit fell 18 percent as sales, administration and marketing costs rose because of its acquisition of Millipore Corp. last year. Alpha Bank Rises Alpha Bank soared 8.4 percent to 5.19 euros after the shares resumed trading today. Greece’s third-biggest bank rejected an unsolicited 2.8 billion-euro ($3.8 billion) takeover bid from National Bank of Greece on Feb. 18. Alpha called the offer inadequate. Hammerson Plc advanced 3.2 percent to 461.8 pence after saying full-year earnings, excluding changes in asset values, increased to 140.2 million pounds from 125.3 million pounds a year earlier. Invensys Plc jumped 5.9 percent to 365.4 pence after the Observer newspaper reported that several engineering companies may bid for the British manufacturing company. Honeywell International Inc., Emerson Electric Co., ABB Ltd., Alstom SA, Siemens AG, and Chinese companies CSR and CNR have considered buying Invensys, the newspaper reported, citing unnamed people. To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net

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