Mixed fortunes for European stocks

European stocks swung between gains and losses after the biggest two-day rally for the benchmark Stoxx Europe 600 Index in 15 months.

Barclays and Volkswagen led a retreat in banks and automakers. Michael Page International Plc tumbled 8.4 per cent after earnings missed analysts' estimates. Swatch Group led gains among Swiss exporters as the franc headed for its biggest three-day decline on record against the euro.

Nokia jumped 10 per cent after Google agreed to buy US rival Motorola Mobility Holdings for about $12.5 billion.

The Stoxx 600 was almost unchanged at 237.5 as of 2.26pm in London after swinging between gains and losses at least 20 times today. The gauge rallied 6.3 per cent in the final two days of last week after a global equity rout left stocks trading at the cheapest since March 2009.

"We are going to see continued volatility for a while yet," James Bevan, chief investment officer at CCLA Investment Management Ltd, said on Bloomberg Television. "I see plenty of excellent buying opportunities amongst defensive and cyclical companies. I am not really worried about a double-dip recession."

An 18 per cent decline from this year's high on February 17th has left the Stoxx 600 trading at 9.8 times the estimated earnings of its companies, according to data compiled by Bloomberg.

Global markets are stabilising after a week of record swings in US stocks that was sparked by SandP's downgrade of its credit rating for the world's largest economy. More than $6 trillion in market value has been wiped off global equities since July 24th amid concern the global economic recovery may be at risk.

National benchmark indexes climbed in all 14 western European markets that were open, except Spain. Germany's DAX rose 0.9 per cent, the UK's FTSE 100 gained 0.5 per cent and France's

CAC 40 increased 0.7 per cent. Italy, Luxembourg, Austria and Greece were closed for a holiday.

Barclays led a retreat in UK banks, falling 4 per cent to 179.7 pence. Royal Bank of Scotland Group Plc slid 1.7 per cent to 26.05 pence and Lloyds Banking Group Plc declined 2 per cent to 33.14 pence.

London home sellers lowered asking prices by the most in a year in August as demand in Britain's most expensive property market was hit by turmoil in financial markets, according to a report from Rightmove Plc.

Volkswagen, Europe's biggest carmaker, led auto shares lower, falling 2.4 per cent to 116.5 pence after rally 9.1 per cent in the previous two trading days.

Continental AG lost 2.6 per cent to €54.99 and Porsche SE slid 1.5 per cent to 45.80 francs. Michael Page plunged 8.4 percent to 366.8 pence as the U.K. recruiter said gross profit growth is slowing in the banking industry. The company also reported a 26 per cent drop in first- half pretax profit to #45.5 million, missing the average analyst estimate of #52.1 million.

Hennes and Mauritz AB lost 1.4 percent to 199 kronor after Europe's second-largest clothing retailer reported a 6 per cent drop in same-store sales for July from the year-earlier period.

Swiss exporters advanced as the franc weakened against the euro, heading for its biggest three-day decline since the European currency's 1999 debut, amid speculation Switzerland will take further action to counter recent gains. SonntagsZeitung newspaper said the Swiss government and the central bank are in "intense" talks over setting a target for their currency.

Zurich Financial Services AG rallied 3.6 per cent to 177.7 francs after both Credit Suisse Group AG and Keefe, Bruyette and Woods raised their recommendations for the Swiss insurer to "outperform". The stock had tumbled 29 per cent this year through the end of last week.

Nokia, the world's biggest maker of mobile phones by volume, jumped 10 per cent to €4.14 after Google agreed to buy Motorola Mobility, gaining wireless patents and entering the hardware business.

Bloomberg