Mining stocks pull region up from three-day fall

Eurostoxx 50: 2,291.89 (+32.16) Frankfurt DAX: 5,965.63 (+131.12) Paris CAC: 3,110.59 (+42.26): EUROPEAN STOCKS advanced yesterday, snapping the biggest three-day drop in almost two months, as investors awaited a Federal Reserve policy statement.

The Stoxx Europe 600 Index advanced 1 per cent in London. The gauge retreated 5.8 per cent over the previous three days as Greek prime minister George Papandreou called a referendum on the nation’s latest bailout package.

“The situation remains better than three weeks ago, despite the uncertainty caused by Papandreou moving on his own to issue the referendum,” said Witold Bahrke, Copenhagen-based senior strategist at PFA Pension.

After the close of European markets, Fed policy makers raised their assessment of the economy while saying “significant downside risks” remain and refraining from taking any additional steps to ease monetary policy.

Euro zone leaders, racing to prevent their week-old debt crisis strategy from unravelling, are holding emergency talks to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.

Mr Papandreou was summoned to Cannes on the eve of a Group of 20 summit where he will hear from French president Nicolas Sarkozy that the “only way to resolve Greek debt problems” is through a deal hammered out last week in a six-day crisis-management marathon.

Rio Tinto, the world’s second-biggest mining company, advanced 4 per cent to 3,383p as copper rose 2.5 per cent on the London Metal Exchange.

Next, a UK clothing retailer, advanced 6.5 per cent to 2,722p after reporting growth in third-quarter brand sales that exceeded analyst estimates.

Lundin Petroleum, an oil explorer with a stake in the giant Avaldsnes-Aldous Major North Sea find, rose 5.6 per cent to 161.60 kronor.

Volkswagen led a gauge of carmakers to the biggest gain of all industry groups in the Stoxx 600, rallying 6 per cent to €127.25.

Logica sank 8.4 per cent to 81.85p as the Anglo-Dutch computer services provider posted third-quarter sales that trailed analyst estimates and cut its annual earnings forecast.

Meda, Sweden’s publicly traded drug maker, fell 7.6 per cent to 59.30 kronor. – (Bloomberg)