By Carla Mozee, MarketWatch
LONDON (MarketWatch)--Mining stocks suffered in European trading
Wednesday, limiting gains on the pan-European index after a
two-session run of advances.
The Stoxx Europe 600 finished less than 1 point lower, at
339.15.
Shares of iron-ore producers were hit as prices for the
commodity dropped to their weakest level in more than five years.
Anglo American PLC fell 2.9%, Rio Tinto PLC and BHP Billiton PLC
(BHP) pulled back 2.1%, Glencore PLC lost 0.9%.
"The global iron-ore market "is clearly oversupplied at present,
with producers beginning to engage in cut-throat competition," and
major producers that can operate relatively cheaply are scaling up
production in an effort to push smaller rivals out of the market,
said commodities analysts at Commerzbank in a Wednesday note. "The
resulting higher initial availability of iron ore on the market is
putting pressure on prices."
The closely watched preliminary November report on China's
manufacturing sector from HSBC will be released Thursday. If
results are weak, "prices will doubtless fall even further," said
Commerzbank.
The pressure on miners also hit the U.K.'s FTSE 100 index ,
which fell 0.2% to 6,696.60. But the pound (GBPUSD) rose against
the dollar following the release of minutes from the Bank of
England's meeting in November. The pound bought $1.5671, up from
$1.5598 ahead of the report. Sterling bought $1.5632 late
Tuesday.
The pound and yields on U.K. government bonds edged higher as
"some [BOE policy board] members held the view that excess capacity
could fall faster on current interest rates than was communicated
in last week's quarterly inflation report," wrote Ashraf Laidi,
chief global strategist at City Index.
However, "these minutes are is unlikely to alter market
expectations that rates will be raised no earlier than next
autumn," he said.
In Frankfurt, the DAX equity index rose 0.2% to 9,472.80. The
index on Tuesday climbed 1.6% and notched its strongest close since
Sept. 30 after a better-than-expected reading of the closely
watched ZEW survey of economic sentiment in Germany.
France's CAC 40 index rose 0.1% to 4,266.19.
Among Wednesday's notable movers, ICAP PLC shares slid 10.1%
after interdealer broker posted a drop in first-half pretax profit.
The company also said its ship-broking arm plans to merge with Howe
Robinson & Co.
Nuclear engineering firm Areva SA issued a second profit warning
in three months, prompting a 15.7% drop in its shares.
Shares of Severn Trent PLC climbed 2.9% as the U.K. water
utility was upgraded at HSBC to neutral from underweight.
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