European Stocks Drop as Manufacturing Slows

European stocks declined as miners fell after manufacturing data missed economists’ estimates for the region and China.

The Stoxx Europe 600 Index dropped 0.3 percent to 338.28 at the close of trading. A gauge of mining stocks fell to its lowest level this year, with iron-ore producers BHP Billiton Ltd. and Rio Tinto Group losing more than 2.5 percent. National equity indexes of Spain and Italy dropped the most among 18 western-European markets.

“The European economy is still fragile, and the recovery has just run into the sand a little bit,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth management unit. “It feels difficult to get behind industrial metals. There’s still oversupply, and it doesn’t look like demand will pick up any time soon, particularly as China slows down.”

A manufacturing gauge for the euro area fell to 50.4 in November, according to preliminary figures by London-based Markit Economics. Economists had forecast 50.8. A reading of 50 is the dividing line between expansion and contraction. In China, a factory measure dropped to a six-month low.

The Stoxx 600 pared losses of as much as 0.9 percent after U.S. data pointed to an improving economy. The Federal Reserve Bank of Philadelphia’s factory index climbed more than forecast, and sales of previously owned homes increased at a faster pace than projected.

A gauge of mining stocks slipped 1.6 percent for the worst performance among 19 industry groups on the Stoxx 600. It has lost 4 percent in the past three days.

BHP, Rio

BHP, the world’s biggest miner, slipped 2.6 percent after Chief Executive Officer Andrew Mackenzie said the time for massive expansions in iron-ore production has ended. Rio Tinto, the second largest, lost 2.6 percent, and Anglo American Plc fell 2.2 percent.

Banco Bilbao Vizcaya Argentaria SA dropped 5.5 percent after selling about 242 million new shares at 8.25 euros each. BBVA said late yesterday that it agreed to pay as much as $2.5 billion to increase its stake in Turkiye Garanti Bankasi AS, Turkey’s largest bank.

The move helped drag Spain’s IBEX 35 Index down 1.6 percent. Italy’s FTSE MIB Index lost 0.9 percent. Greece’s ASE Index climbed the most among the 18 markets.

Technip SA slid 7 percent after saying it will bid 8.30 euros a share for CGG SA. The French seismic surveyor of oil and natural-gas fields surged 22 percent after rejecting Technip’s approach.

Dividend Resumed

ThyssenKrupp AG rose 2.8 percent as the steelmaker resumed dividend payments after posting its first annual profit in four years. Schmolz & Bickenbach AG added 2.6 percent after increasing its full-year earnings forecast, even as it cut projections for sales growth. Randstad Holding NV gained 4.5 percent after the recruiter said sales rose in October and predicted as much as 70 million euros ($87.8 million) in cost savings in the next two years.

The Stoxx 600 has rebounded 9.1 percent from its low last month as Mario Draghi said the European Central Bank’s expanded purchase program could include government bonds and as Japan’s central bank added economic stimulus.

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