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MW: European stocks fall, hit by slump in commodity prices
 
European stocks fell Monday, with commodity shares yanked lower by the persistent rout in metals and oil that’s driving their prices deeper into the red for the year.

The Stoxx Europe 600 SXXP, -0.37% dropped 0.5% to 379.92, as all sectors lost ground.

Standing out were the mining SXPR, -0.93% and oil and gas SXEP, -0.39% sectors, as prices for oil and for metals across the board were shoved lower. Copper prices CLZ5, +0.00% declined more than 2%, and oil prices CLF6, +1.48% fell 1.5%, crunched in part by strengthening in the dollar DXY, +0.27% as the Federal Reserve looks poised to begin raising interest rates for the first time in nearly a decade.


“Markets are being pulled by big forces in different directions, with some investors seeing the expected extension to monetary easing from the [European Central Bank] next week to provide further impetus for equity markets,” said Simon Smith, chief economist at FXPro, in a note.

Meanwhile, “the prospect of tightening from the Fed next month at a time of slowing global growth, as evidenced by weaker commodities, is a reason to be more bearish,” he said.

In the metals group, copper producer Antofagasta PLC ANTO, -2.32% fell 1.9% and Glencore PLC GLEN, -2.07% gave up 1.8%, as did iron ore heavyweight BHP Billiton PLC BLT, -1.60%

In the oil and gas sector, French energy producer Total SA FP, -1.06% dropped 1.6% and Spain’s Repsol REP, +0.29% was down 1.2%, while oil equipment and services provider Amec Foster Wheeler PLC AMFW, -3.88% was pulled 3.1% lower.

Crude oil prices CLF6, +1.48% briefly turned higher during Monday’s session following a report that Saudi Arabia was willing to cooperate with fellow producers to stabilize prices. But that gain quickly faded.

Copper prices are facing a 29% fall for 2015, which would be their worst year since a nearly 54% plunge in 2008. West Texas Intermediate prices are on track for a 22% decline this year. That would follow the roughly 46% tumble in 2014.

BLT, -1.60% PMIs: The euro EURUSD, -0.3381% on Monday was trading at $1.0643, little changed from $1.0645 late Friday in New York. The shared currency had traded modestly higher earlier Monday after data firm Markit said a preliminary November reading of business activity in the eurozone marked the strongest expansion since May 2011. The eurozone composite purchasing managers index rose to 54.4 in November.

While the “most timely, on-the-ground reading of economic conditions in the single currency zone” came in better than anticipated, “we’re tempering our enthusiasm about what they could mean for ECB policy and the euro,” wrote Matt Weller, senior market analyst at Forex.com, in a note.

A pledge last week by ECB President Mario Draghi “that the ECB would ‘do what [it] must to raise inflation as quickly as possible’ still points to more easing action,” said Weller.

Business activity in France expanded in November, although there were some signs of slowing following the deadly terrorist attacks on Nov. 13 in Paris.

On national indexes, France’s CAC 40 PX1, -0.44% gave up 0.6% to 4,881.25. Germany’s DAX 30 DAX, -0.25% lost 0.2% at 11,092.17, and the U.K.’s FTSE 100 UKX, -0.46% fell 0.5% to 6,304.92.

European stocks last week rose 3.3%, their best weekly gain in a month.
Source