European stocks close

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 The former premier had withdrawn the People of Liberty’s five ministers from the cabinet on Sept. 28, prompting Letta to call today’s vote in an attempt to rebuild a parliamentary majority.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.