European stocks fell to a seven-week low

European stocks fell to a seven-week low, following a selloff in Asian equities, as investors speculated this year’s rally has overshot the earnings outlook amid concern that central banks may pare stimulus measures.

Royal Bank of Scotland Group Plc slid the most in almost six weeks after saying Chief Executive Officer Stephen Hester will resign this year. Home Retail Group Plc dropped 10% after posting first-quarter sales that missed analysts’ estimates. Rhoen-Klinikum AG jumped 12% after its shareholders abolished a voting threshold for mergers.

RBS lost 6% to 306.2 pence, the most since May 3, after Stephen Hester, chief executive officer of Royal Bank of Scotland Group Plc, said he is resigning later this year at the board’s request as the state-controlled British bank prepares for privatization.

The Stoxx Europe 600 Index slipped 1.4% to 286.57, heading for its worst weekly decline in a year. The gauge has lost 7.7% since Federal Reserve Chairman Ben S. Bernanke said May 22 that the central bank may pare its quantitative easing if the U.S. economy improves sustainably.

“We’ve had very low volatility in this market rally and now we’re getting more volatility,” experts of Lloyds TSB Bank Plc said. “The fact that global markets have risen from the lows of last autumn by about 20% or so, people can get carried away with that. Clearly that’s unsettling a lot of people.”

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