Photographer: Martin Leissl/Bloomberg

European Stocks Retreat, Paring Weekly Advance as Miners Decline

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European stocks slipped, paring a weekly gain, as miners and energy companies retreated.

A gauge of commodity producers posted the biggest decline of the 19 industry groups on the Stoxx Europe 600 Index as Societe Generale SA said iron ore prices may extend losses. BHP Billiton Ltd. slid 2.6 percent. Royal Dutch Shell Plc and Total SA contributed the most to a drop in energy stocks, as oil prices fell.

The Stoxx 600 declined 0.2 percent to 397.8 at the close of trading, paring its weekly gain to 0.6 percent. Shares briefly erased losses after U.S. factory-order data beat forecasts. The equity gauge has jumped 16 percent this year amid optimism European Central Bank stimulus will revive the region’s economy, while a weakening euro will boost profits. The rally propelled valuations to the highest in at least a decade last month.

“Everything looks expensive and we’re probably due a pullback soon,” said Ros Price, the chief investment strategist at Seven Investment Management in London. “Central banks have made asset prices go up -- let’s see what they can really do to the economy. I’d say watch things carefully in April and be prepared. Yes, Europe’s recovery is picking up, but it’s still very fragile.”

ECB minutes released today showed policy makers are prepared to alter the pace of bond-buying if necessary. While Governing Council members currently deem the scope of their quantitative-easing program appropriate, this assessment may change over time as higher-than-usual uncertainty surrounds current economic projections, according to the minutes of the group’s March 4-5 meeting.

Low Volume

The volume of Stoxx 600 shares changing hands was 34 percent lower than the 30-day average, data compiled by Bloomberg show. Markets in Denmark, Iceland and Norway were shut today, while Sweden opened for a half day. All European bourses are closed for Easter holidays Friday and Monday.

Traders also watched U.S. economic reports, after the Federal Reserve said the timing of its first interest rate increase since 2006 will be data-dependent. Jobless claims dropped by 20,000 to 268,000 in the week ended March 28, the lowest since the period ended Jan. 24 and second-lowest in at least a year, Labor Department data showed today.

Deutsche Lufthansa AG slipped 2.6 percent after Barclays Plc cut its recommendation on the airline to equal weight, similar to hold, from overweight.

Among stocks moving on corporate news, Marks & Spencer Group Plc added 4.4 percent after saying sales at its general-merchandise unit rose for the first time since 2011. Royal KPN NV climbed 2.8 percent after saying it received interest from several parties about the acquisition of its Belgian mobile-phone business Base.

(An earlier version of this story corrected the markets closed for holidays today.)

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