European Stocks Rebound as Mining Company Shares Advance

Bank of England Governor Mervyn King
Bank of England Governor Mervyn King. Photographer: Chris Ratcliffe/Bloomberg

European stocks climbed in the final hour of trading, trimming a third week of losses for the Stoxx Europe 600 Index, as a rebound in commodity companies offset renewed concern about the euro area.

Glencore International Plc and Xstrata Plc led a gauge of commodity companies higher as copper climbed in New York. UniCredit SpA led a retreat by lenders, tumbling 3.1 percent. British Sky Broadcasting Group Plc lost 3.4 percent after the pay-TV broadcaster said its Sky News channel had approved the hacking of e-mails.

The Stoxx 600 climbed 0.1 percent to 259.07 at the close in London, erasing a decline of as much as 0.9 percent. The gauge has still lost 1.6 percent this week as the minutes from the U.S. Federal Reserve’s last policy meeting damped expectations for further monetary stimulus.

“Negative sentiment has turned positive,” said Angus Campbell, head of market analysis at Capital Spreads in London. “The reversal in the market is yet another encouraging sign there there is still risk appetite out there if stocks suddenly present another buying opportunity.”

The Stoxx 600 slumped 2.1 percent yesterday as Spain sold fewer bonds at an auction than it had targeted. Spanish bonds extended their decline today, leading losses among Europe’s higher-yielding government securities along with Italian debt.

Spain’s 10-year bonds dropped for a third day, pushing the yield on the country’s benchmark debt seven basis points higher to 5.76 percent, after an International Monetary Fund spokesman said the nation is facing “severe” challenges.

Italian, Spanish Debt

Italy’s 10-year yield rose seven basis points to 5.44 percent today, with the spread over bunds widening 12 basis points to 370 basis points. France’s 10-year bonds also slid as borrowing costs increased when the nation sold 8.4 billion euros of debt.

National benchmark indexes fell in nine of the 15 western-European markets trading today. France’s CAC 40 Index added 0.2 percent and the U.K.’s FTSE 100 Index gained 0.4 percent. Germany’s DAX Index lost 0.1 percent.

Markets in Denmark, Norway and Iceland were closed for a holiday today. All Western-European markets are closed tomorrow for the Good Friday holiday.

Glencore, the largest publicly traded commodity supplier, rallied 5.8 percent to 411.8 pence, leading a rebound in commodity stocks. Xstrata Plc jumped 3.5 percent to 1,112 pence, BHP Billiton Ltd. climbed 1.6 percent to 1,907 pence and Vedanta Resources Plc gained 2.1 percent to 1,235 pence.

Copper Advances

Copper climbed in New York for the first time in three days as reports showing an improving labor market and rising consumer confidence added to signs of recovery in the U.S., the world’s second-biggest consumer of the metal.

Today’s U.S. Labor Department report showed that initial jobless claims fell to 357,000 in the week to March 31, their lowest level in four years. The median economist forecast called for a decline to 355,000, according to a Bloomberg News survey.

Banks still retreated. UniCredit, Italy’s biggest lender, slid 3.1 percent to 3.31 euros. Banca Popolare di Milano Scarl lost 4 percent to 35.2 euro cents, Commerzbank AG declined 1.9 percent to 1.9 percent to 1.75 euros and BNP Paribas SA dropped 1 percent to 32.88 euros.

BSkyB Shares Drop

Elsewhere, BSkyB declined 3.4 percent to 635.5 pence after the pay-TV broadcaster in which Rupert Murdoch’s News Corp. owns a 39 percent stake said its Sky News channel approved the hacking of e-mails on two occasions.

Executives at Sky News cleared a reporter to access e-mails as part of his investigation into the 2008 case of a British couple who faked the husband’s death to collect life and mortgage insurance, the channel said in a statement today.

Veolia Environnement fell 0.8 percent to 11.25 euros after Deutsche Bank AG downgraded the world’s largest water utility to sell from hold.

Merck KGaA dropped 1.8 percent to 83.40 euros. The German drugmaker was cut to neutral from outperform at Exane BNP Paribas.

Booker Group Plc slid 4 percent to 81.25 pence after reporting earnings. The wholesaler of grocery products was downgraded to hold from buy at Panmure Gordon & Co.

National Express Group Plc, which is bidding for the U.K. Great Western rail franchise, jumped 3.5 percent to 236.5 pence after Morgan Stanley upgraded the company to overweight from equal weight, meaning investors should buy the shares.

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