Miners weigh on European shares

European stock markets closed one of its best quarters with a whimper, raising questions about the durability of a rally that goes back to March.
France and the United Kingdom led the third-quarter romp with France’s CAC 40 increased 20.86% to 3795.41 and the FTSE-100 gained 20.82% to close at 5133.90. Percentage was the best quarterly earnings in the 25 year history of the FTSE-100 index and the best quarter for the CAC 40 index since the end of 1999. Germany’s DAX rose 18.02% to 5675.16, its best quarter since 2003.
The pan-European Dow Jones Stock 600 Index gained 17.7% in the quarter, its best performance since the fourth quarter of 1999.
For day, the FTSE 100 declined 0.5% to 5133.90, the DAX fell 0.7% to 5675.16 and France’s CAC-40 fell 0.5% to 3795.41. Asian stock markets ended mixed, while U.S. stocks fell in early trading.
During the quarter, global stock markets extended a recovery that began in early March as the increasingly intense fear of financial system problems began to dwindle. Since then, investors have steadily increased their appetite for risk, helping to boost the stock markets.
The markets in Poland, Hungary and the Czech Republic had strong quarters, but many Central and Eastern European markets have not found the tremendous advances made in the second quarter. The Russian market, for example, received about 27% in the third quarter compared with an increase of 43% in the second quarter.
The median few sessions late in the third quarter, however, have raised the specter of tougher days ahead. Talk of weak economic growth, the difficult fiscal situation and a market still fragile financial sector has been given a little more to chew on in recent weeks.
Earnings in the world market "reflects all the additional good news" from last year, said Benjamin Segal, who directs 7 billion U.S. dollars Neuberger Berman international portfolios. "We have to see more improvements than is reasonable to expect that to justify [other] move from here. The bar is already pretty high."
In Europe, economic readings have been better, but not particularly great. Trust is in the UK, but confidence-building measures remain well outside the pre-recession levels. In Germany, employment data improved, but the increase may have resulted more from changes tabulation rather than any improvement in the national employment picture.
In the U.S., things are even more confused. Economists in general was surprised to see decline in consumer confidence recently. They also expressed doubts on the index yesterday, the Chicago purchasing manager, indicating the contraction in U.S. economy Midwest manufacturing.
These readings are an advance worrying Friday’s report U.S. employment. A survey of private sector employment processing company ADP expected a decline of nearly 250,000 jobs in the U.S. during September. Although much smaller than the job losses earlier this year, shows that the U.S. economy continues to repair very slowly.
Economically sensitive stocks, such as miners and retailers fell during the day. Miner BHP Billiton lost 1.2% and retailer Marks & Spencer fell 3.4%. M & S had a weak sales report that contributed to their decline.
In market action, shares UK hedge fund manager Man Group rose 7.5%. The company said its assets under management have stabilized in recent months, helped by a slowdown in withdrawals from major institutional investors.
In the insurance sector, Allianz rose 1.8% and Axa rose 2.9%.
Swiss drugmaker Novartis 1.1% after it was upgraded to "buy" from "hold" at Citigroup, citing factors such as a portfolio of attractive airway positive currency tailwinds.