European Stocks Temper Losses on Second Day as Miners Rebound

Citi 2016 Investment Outlook
  • Stoxx 600 declines to its lowest level since October
  • Volkswagen rises after saying probe smaller than first thought

European stocks moderated a decline after yesterday’s selloff as commodity producers rebounded from their lowest level in six years.

Gains exceeding 3.8 percent in Glencore Plc and Rio Tinto Group pushed a gauge of mining shares higher for the first time in seven days. That helped the Stoxx Europe 600 Index pare a drop of as much as 0.9 percent.

The Stoxx 600 lost 0.4 percent at the close of trading, after rising as much as 0.4 percent earlier. It mirrored a decline in global markets yesterday.

“Investors have had a difficult year and they’re struggling to see where a positive catalyst could come from,” said Alex Scott, who helps oversee about $14 billion as Seven Investment Management’s deputy chief investment officer. “We have to be careful about being too negative. Sometimes value is good enough as a catalyst.”

The Stoxx 600 has fallen 5.5 percent in December amid a rout in commodity producers and disappointment over the European Central Bank’s last meeting. That’s pushed valuations of companies on the gauge to 15.8 times estimated earnings, compared with a multiple of 17.3 in April.

Among stocks active on corporate news, Bayer AG slid 2.1 percent after the European Medicines Agency began investigating a trial of the company’s best-selling prescription drug. Stagecoach Group Plc plunged 14 percent after the bus operator lowered its full-year profit estimate.

Volkswagen AG rallied 6.2 percent after saying an emissions probe affects fewer vehicles than initially thought. Ashtead Group Plc climbed 8.6 percent after saying full-year results will exceed its earlier expectations.

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