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European stocks halt losing run as miners rally

European stocks halt losing run as miners rally
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First Published: Tue, Jul 20 2010. 11 56 PM IST
Updated: Tue, Jul 20 2010. 11 56 PM IST
Paris: European stocks ended mostly unchanged on Tuesday, pausing after a one-week losing run as mining stocks rallied along with metal prices in late session, offsetting disappointing results from US companies.
Spanish stocks such as Santander also rose, helped by Spain’s successful Treasury bill sale that eased worries over the country’s ability to tap the debt market.
The FTSEurofirst 300 index of top European shares closed 0.04% higher at 1,006.64 points.
Santander was up 2.1%, BBVA rose 1.9% and Bankinter gained 1.9%. Spain’s IBEX, which has been underperforming Europe’s top equity indexes over the past three months, ended up 1.3%.
Spain’s Economy Minister Elena Salgado said the sale of nearly €6 billion ($7.75 billion) in Treasury bills showed signs of confidence were returning to the market ahead of the release of results of stress tests on European banks due on Friday.
The premium investors demand to buy Spanish government bonds rather than benchmark German Bunds fell to its lowest level in almost two months in the wake of the successful Treasury bill sale.
“A few regional banks will need additional capital but the punch line is that the overall results from the tests won’t have a major impact on markets,” AXA Investment Managers strategist Franz Wenzel said.
Banking stocks ended the session mixed but off the day’s lows, as investors remained cautious ahead of the stress test results and after results from Wall Street firm Goldman Sachs.
BNP Paribas lost 0.4%, UBS gained 0.1% and Deutsche Bank rose 0.7%.
Finding a support level
“Recent corporate results have been below forecast, although they haven’t been disastrous either and the overall newsflow is pretty mixed,” said Jacques Henry, analyst at Louis Capital Markets in Paris.
“This is a chartist’ market, with the indexes bouncing up and down between support levels and resistance levels,” he said.
The Euro STOXX 50, the euro zone’s blue chip index, ended down 0.3% at 2,627.28 points after falling to as low as 2,586.49 in the session, just a hair above the index’s key 23.6% retracement level of the index’s April high to its May low.
Around Europe, UK’s FTSE 100 index lost 0.2%, Germany’s DAX index dropped 0.7%, and France’s CAC 40 fell 0.5%.
Miners featured among the top gainers, with Xstrata climbing 3.7% and Rio Tinto adding 4.1%, gaining ground along with metal prices on rising optimism over the outlook for demand.
Nokia rose 2.2% on news the world’s top cellphone maker has sent out headhunters to find a replacement for CEO Olli-Pekka Kallasvuo.
European luxury goods firm gained ground after Hermes lifted its full-year forecast and Swiss watch exports rose 35% in June.
Burberry Group, LVMH, PPR, owner of Gucci Group, and Richemont gained 0.5% to 1.8%.
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First Published: Tue, Jul 20 2010. 11 56 PM IST
More Topics: Markets | Europe | Stocks | Euro | Spain |