European Stocks Little Changed; Carmakers, Miners Advance
European (SXXP) stocks closed little changed, after the biggest weekly selloff this year, as a rebound in automakers and mining companies offset an unexpected drop in U.S. housing data.
Renault SA (RNO) and Antofagasta Plc rallied at least 2 percent after both tumbled more than 3 percent yesterday. BT Group Plc (BT/A) climbed after the U.K.’s largest fixed-line phone company said it will cut its pension deficit by half. Randgold (RRS) Resources Ltd. and Publicis Groupe SA (PUB) paced declining shares.
The Stoxx Europe 600 Index (SXXP) rose 0.1 percent to 265.65 at the close in London, paring this week’s retreat to 2.5 percent, the biggest drop since December. The gauge has still advanced 8.6 percent in 2012 as the European (SXXP) Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders.
“We’ve seen some disappointing data this week, so the market is a bit on edge,” said John Plassard, director at Louis Capital Markets SA in Geneva. “The U.S. home sales report was below expectations, which has some investors questioning the strength of the U.S. economy’s recovery.”
National benchmark indexes rose in 13 of 18 western- European markets. France’s CAC 40 rose 0.1 percent, the U.K.’s FTSE 100 and Germany’s DAX both rose 0.2 percent. The number of shares changing hands on the Stoxx 600 (SXXPVOLC) was 7.7 percent lower today than the 30-day average, according to data compiled by Bloomberg.
U.S. Home Sales
A U.S. Commerce Department report today showed purchases of new houses unexpectedly fell in February for a second month. Sales dropped 1.6 percent to a 313,000 annual pace, the slowest since October, compared to 318,000 in January. The median estimate of 78 economists surveyed by Bloomberg News called for 325,000.
Renault rallied 2.5 percent to 40.30 euros today, leading a gauge of companies in the auto industry 1.4 percent higher. PSA Peugeot Citroen SA increased 2.3 percent to 12.89 euros and Volkswagen SA increased 1.7 percent to 132.35 euros.
Mining companies also advanced as copper rebounded in London. Antofagasta rallied 2.7 percent to 1,172 pence, the first increase in four days. Kazakhmys Plc advanced 2.5 percent to 935.5 pence and Rio Tinto Group gained 1.5 percent to 3,382.5 pence.
BT Group rallied 5.4 percent to 232.1 pence, its highest price since May 2008, after the company said it will pay down about half of its 4.1 billion-pound ($6.5 billion) deficit in its pension fund before the end of this month. That allows the company to consider a higher dividend.
“Dividend upside has been a long-standing driver of our positive view on BT,” Jefferies Group Inc. analyst Jerry Dellis said in a note. “Incremental positive is that upgrades may now be communicated in May, six months earlier than expected.”
Elsewhere, CGGVeritas, the world’s largest seismic surveyor of oil fields, climbed 4.7 percent to 22.70 euros after JPMorgan Chase & Co. raised its recommendation for the shares to neutral from underweight.
Enel Green Power SpA (EGPW) gained 4 percent to 1.45 euros after Italy’s largest renewable energy company forecast earnings before interest, taxes, depreciation and amortization to rise to 2.6 billion euros by 2016, up from 1.4 billion euros in 2011.
Randgold paced declining shares, falling 2 percent to 5,650 pence after Citigroup Inc. downgraded the gold producer to neutral, the equivalent of a hold rating, from buy. Randgold yesterday slumped the most since October 2008 after a military coup in Mali, where the it mines two-thirds of its gold.
Publicis dropped 2.7 percent to 41.17 euros. Nomura Holdings Inc. sold 3.35 million of the company’s shares for 41 euros apiece, according to the terms obtained by Bloomberg News. The bank sold the shares as part of the so-called delta hedge transaction for an undisclosed client, the terms showed.
Persimmon Plc retreated 3 percent to 641.5 pence after Goldman Sachs Group Inc. lowered its recommendation for the homebuilder to neutral from buy. The shares have surged 36 percent so far this year versus a 15 percent advance for the FTSE 350 Household Goods and Home Construction Index.
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