European stocks rise as commodities rebound

European stocks rise, erasing earlier losses, as commodity producers rebounded from their lowest level in six years.

Gains exceeding 5 per cent in Glencore and Rio Tinto Group pushed a gauge of mining shares higher for the first time in seven days.

That helped the Stoxx Europe 600 Index erase a drop of as much as 0.9 percent. The Stoxx 600 added 0.2 per cent in London, rebounding from a decline yesterday that mirrored a global selloff.

“We have to be careful about being too negative,” said Alex Scott, who helps oversee about $14 billion as Seven Investment Management’s deputy chief investment officer.

“When we step back and look at the fundamental macro picture, then things start to look more encouraging. Sometimes value is good enough as a catalyst.” A rout in commodity producers and disappointment over the European Central Bank’s last meeting have sent the Stoxx 600 down 4.9 per cent in December.

That’s pushed valuations of companies on the gauge to 15.8 times estimated earnings, compared with a multiple of 17.3 in April. Among stocks active on corporate news, Volkswagen rallied 7.7 per cent after saying an emissions probe affects fewer vehicles than initially thought.

Ashtead Groupclimbed 8.8 per cent after saying full-year results will exceed its earlier expectations. Bayer AG slid 1.5 per cent after the European Medicines Agency began investigating a trial of the company’s best-selling prescription drug.

Stagecoach Group plunged 13 per cent after the bus operator lowered its full-year profit estimate.

- Bloomberg