European Stocks Reverse Early Gains on China, Middle East Worryby and
Home Retail surges after Sainsbury says it made an approach
Volkswagen drops amid investor concern about U.S. penalties
European stocks advanced, recovering some of the session’s earlier gains, after yesterday’s worst start to a year.
Commodity producers posted the biggest gains among Stoxx Europe 600 Index groups. Glencore Plc and ArcelorMittal added at least 3.5 percent, helping send the regional benchmark up 0.6 percent at the close of trading. It rallied as much as 1.1 percent in the first ten minutes of trading, and then fell as much as 0.5 percent in intraday trading.
The Stoxx 600 tumbled the most in a month yesterday as a selloff in China reignited concern that a slowdown there will hamper global recovery. A gauge of miners advanced 1.8 percent today, rebounding from their biggest drop in almost four weeks. Germany’s DAX Index added 0.3 percent, after its worst decline since August.
“It’s just buying the dip,” said John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva. “There’s a rebound in commodity companies. They were hammered so much yesterday that people are looking for opportunities.”
Among shares active on corporate news, Home Retail Group Plc surged 41 percent, the most on record, after J Sainsbury Plc said it approached the company regarding a possible offer and was rejected. Sainsbury fell 5.2 percent after briefly rising 8.1 percent after the announcement.
Numericable-SFR SAS and Altice NV jumped at least 9.3 percent after Orange SA confirmed preliminary merger talks with Bouygues SA over its telecommunications unit.
Volkswagen AG fell 4 percent after the U.S. Justice Department sued the German automaker, accusing it of installing illegal devices in vehicles to defeat emission tests. Porsche Automobil Holding AG slid 2.1 percent.
Next Plc fell 4.6 percent after posting Christmas sales that missed estimates and forecasting full-year profit near the lower end of its range.