By Tommy Stubbington
European shares ended the session broadly unchanged Wednesday,
as investors weighed upbeat economic data from earlier in the week
against a lasting slump in commodity prices, particularly burdening
miners.
The Stoxx Europe 600 closed the day less than 0.1% lower, with
energy companies recording some of the sharpest declines after iron
ore prices sank to a 5 1/2 -year low overnight. Brent crude rose
around 1.2% to $79.37 a barrel, but remains almost 30% down on the
year and more than 7.5% lower since the start of the month.
Premier Oil PLC, Cairn Energy PLC and Subsea 7 SA all fell
between 3.7% and 5%, while heavyweight multinational BHP Billiton
PLC and Rio Tinto PLC both declined for than 2%.
Coupled with some disappointing earnings, from the likes of
Royal Mail PLC and Intertek Group PLC, that largely erased any
signs of optimism in equity markets, stemming from better than
expected German economic data or comments by European Central Bank
President Mario Draghi earlier in the week.
On Monday, Mr. Draghi underscored the central bank's commitment
to expanding its balance sheet--the value of assets it holds--and
widen its stimulus efforts to ensure that inflation rises back to
the ECB's target of just below 2%, fueling a rise in stocks.
In currency markets Wednesday, the British pound notably
strengthened after the Bank of England indicated concern among
officials that inflation could overshoot the bank's target if
unemployment keeps tumbling in the minutes of its November
meeting.
Two members of the nine-person rate-setting committee voted for
a rate rise, as expected. But the minutes also hinted at divisions
among the seven-member majority about how quickly falling
joblessness could eat up the slack in the economy that keeps a lid
on inflation.
In late trade, sterling was 0.4% higher against the dollar at
$1.5666, having touched a 14-month low ahead of the minutes.
Elsewhere, the euro edged higher against the dollar to $1.2551.
The yen fell against the greenback after the Bank of Japan left its
monetary policy on hold, as expected.
The Swiss franc, meanwhile, fell briefly on Wednesday afternoon,
after a new poll showed that 38% of respondents are in favor of the
Save Our Swiss Gold initiative, down from 44% in an earlier
poll.
The results come roughly a week and a half before a Nov. 30 vote
that could force the Swiss National Bank to hold at least a fifth
of its assets in gold, forbid it from selling any of its holdings
and require it to repatriate gold held at the central banks of the
U.K. and Canada.
Organizers of the initiative say the measure is needed because
the SNB's three-year-old effort to prevent a rise in the Swiss
franc has left its balance sheet stuffed with euros, a currency
they say is devalued.
Gold fell around 1.6% on Wednesday's poll, or a little more than
$18 on the day, to $1,177.40 a troy ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com and
Josie Cox at josie.cox@wsj.com
Access Investor Kit for Rio Tinto Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=AU000000RIO1
Access Investor Kit for BHP Billiton Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0000566504
Access Investor Kit for Intertek Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0031638363
Access Investor Kit for Premier Oil Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B43G0577
Access Investor Kit for Cairn Energy Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B74CDH82
Access Investor Kit for BHP Billiton Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US05545E2090
Access Investor Kit for Cairn Energy Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US12776P2002
Subscribe to WSJ: http://online.wsj.com?mod=djnwires