European stocks closed little changed at a 10-week high as a rally in mining companies offset slower-than-forecast economic growth in Japan.
Fresnillo Plc soared 6.6 percent to a two-month high as precious metals gained. Prudential Plc climbed to the highest in more than two decades after posting a 22 percent jump in profit. Telekom Austria AG dropped 1.6 percent after reporting second-quarter earnings that missed analysts’ projections. Ladbrokes Plc (LAD) slid 2.6 percent as JPMorgan Chase & Co. downgraded the U.K. gambling company.
The Stoxx Europe 600 Index increased less than 0.1 percent to 306.08 at the close of trading, having earlier risen as much as 0.2 percent ad declined 0.6 percent. The benchmark gauge added 0.6 percent last week as better-than-forecast economic data in Europe and China outweighed concern that the Federal Reserve will reduce the pace of its bond-purchase program. The measure has rallied 9.4 percent this year.
“Japan has delivered some conflicting data recently, but market participants are in a positive mood and see the economy is not on a bad road,” said Christian Zogg, who manages about $540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “Stocks are still the better bet as opposed to bonds, which should lead some large institutional investors to rethink their investments, and that should continue to support shares in the mid-term.”
The volume of shares changing hands in Stoxx 600 companies was 33 percent lower than the average of the last 100 days, according to data compiled by Bloomberg.
Japan’s Topix lost 0.6 percent on a report that showed the nation’s economy expanded an annualized 2.6 percent in the second quarter, slowing from a revised 3.8 percent in the previous three months. The median forecast of economists surveyed by Bloomberg was for 3.6 percent growth.
Still, the German Economy Ministry is predicting that growth in the second quarter was about 0.75 percent, according to a person familiar with the forecast, who asked not to be identified because the projection is confidential. That exceeds the 0.6 percent median of 46 economist estimates compiled by Bloomberg. The Federal Statistics Office will release the data on Wednesday.
Euro-area stocks have risen half as much as global benchmarks this year, leaving them cheaper than equities in the U.S. and Asia as the region’s economy starts to recover from the longest recession on record.
After a 7.2 percent gain in 2013 through last week, the Euro Stoxx 50 Index trades at 12.5 times projected earnings, 6.7 percent less than in 2009, the last time the euro area was in the final quarter of a contraction, data compiled by Bloomberg show. In the U.S., where the economy is in its 10th straight quarter of growth, the S&P 500 is valued at 15.3 times estimated profit and Japan’s Topix trades at 14.1 times income after Prime Minister Shinzo Abe vowed to end two decades of deflation.
Fresnillo, the world’s biggest primary silver producer, rallied 6.6 percent to 1,103 pence, leading a gauge of mining shares to the best performance among 19 industry groups in the Stoxx 600. Randgold Resources Ltd. advanced 2.5 percent to 4,841 pence. Gold and silver climbed for a fourth day.
Prudential, the U.K.’s biggest insurer by market value, rose 4.1 percent to 1,232 pence, the highest price since at least September 1988. Operating profit climbed to 1.42 billion pounds ($2.2 billion) in the first half from 1.16 billion pounds a year earlier. That beat the 1.3 billion-pound estimate of 17 analysts provided by the company.
Catlin Group Ltd. (CGL) rose 1.1 percent to 495.4 pence as HSBC Holdings Plc raised the second-largest Lloyd’s of London insurer by market value to overweight from neutral, meaning investors should buy the shares.
‘‘Catlin is the largest syndicate at Lloyd’s,” HSBC said. “We believe that this is putting it in a very strong position at a time when the smaller players may be challenged by the setting up of broker facilities.”
Roche Holding AG added 1.5 percent to 239.60 Swiss francs. NZZ am Sonntag said the Swiss drugmaker is distancing itself from a possible takeover of Alexion Pharmaceuticals Inc., without saying where it got the information. Roche was said to have informally approached Alexion in July about a deal.
Opap SA gained 4 percent to 7.49 euros after Emma Delta, a Cyprus-based fund, signed a contract to buy a 33 percent stake in the Greek gambling company.
Telekom Austria (TKA) slid 1.6 percent to 5.63 euros. Second-quarter earnings before interest, taxes, depreciation and amortization fell to 330.3 million euros ($439 million) from 364.8 million euros a year earlier. That compared with the average 332.7 million-euro analyst estimate.
Ladbrokes declined 2.6 percent to 193.9 pence as JPMorgan Chase & Co. cut the stock to underweight from neutral, meaning investors should sell the shares. The brokerage cited the weak outlook for U.K. retail and limited revenue growth in an increasingly competitive online market.
Deutsche Boerse AG lost 2.7 percent to 53.94 euros. Equinet Bank AG trimmed its rating on the operator of the Frankfurt stocks exchange to sell from hold, citing the risk of consensus earnings downgrades.
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