Weak miners pressure European stocks; drugmakers up

By Harpreet Bhal

LONDON (BestGrowthStock) – European shares ended lower on Monday, with miners weak as metals prices fell on a strengthening dollar, while gains in defensive food producers and drugmakers limited wider losses.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares closed 0.1 percent lower at 1,013.06 points, after climbing to a high of 1,025.78 earlier in the session.

The index, which rose nearly 26 percent in 2009, has struggled to gain ground this year and is down more than 3 percent since the start of 2010 on sovereign debt worries in the euro zone peripheral economies.

Anglo American (AAL.L: ), Eurasian Natural Resources (ENRC.L: ), Kazakhmys (KAZ.L: ), BHP Billiton (BLT.L: ), Xstrata (XTA.L: ) and Rio Tinto (RIO.L: ) shed 0.4 to 3 percent as copper fell more than 5 percent and other industrial metals tumbled.

On the upside, drugmakers and food producers were higher, boosted by their safe-bet qualities and as analysts said European exporters could benefit from a weak outlook for the euro.

“There is no doubt that there are parts of the European economy which are going to benefit from the euro’s weakness as it increases the competitiveness of their goods and services on a global scale,” said Heino Ruland, strategist at Ruland Research.

Associated British Foods (ABF.L: ), Unilever (ULVR.L: ), Bayer (BAYGn.DE: ) and Sanofi-Aventis (SASY.PA: ) rose 0.1 to 0.9 percent.

The euro fell (Read more about the trembling euro. ) to a four-year low against the dollar, pressured by worries that fiscal tightening by highly indebted euro zone economies could hamper growth in the region.

Highlighting the uncertainty, Greek Prime Minister George Papandreou told a newspaper his country’s austerity measures were sustainable only if investment and economic growth in the country could be stimulated.

German Chancellor Angela Merkel said on Sunday the $1 trillion European Union (EU) rescue plan had only bought time to sort out the yawning gap between the euro zone’s strongest and weakest economies.

Adding to pressure on equities, U.S. manufacturing data and retailers’ results signaled that the U.S. economic rebound may be slowing.

MAN GROUP FALLS

Shares in hedge fund firm Man Group (EMG.L: ) fell 9 percent and hit their lowest level in more than a year as investors fretted about the $1.6 billion it is paying for rival GLG Partners (GLG.N: ).

Among other movers, Britain’s Prudential (PRU.L: ) fell 1.5 percent after it finally launched a $21 billion rights issue to help finance its acquisition of AIG’s (AIG.N: ) Asian insurance business.

On the upside, German chipmaker Infineon (IFXGn.DE: ) gained 0.9 percent, buoyed by a report in the Financial Times Deutschland that the company is in talks with U.S. peer Intel (INTC.O: ) to sell its wireless chip unit.

Galp Energia (GALP.LS: ) added 3.1 percent. Workers at the Portuguese oil company decided to suspend a planned a strike over a wage dispute, which would have halted the country’s two refineries for four days starting on Tuesday.

Across Europe, the FTSE 100 (.FTSE: ) index closed flat while France’s CAC 40 (.FCHI: ) slipped 0.5 percent. Germany’s DAX (.GDAXI: ) gained 0.2 percent.

Stock Today

(Editing by David Cowell)

Weak miners pressure European stocks; drugmakers up