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* STOXX Europe 600 index up 1.2 pct
* Commodities-related stocks in demand
* Burberry slumps after update
By Atul Prakash
LONDON, Oct 18 European shares bounced back on
Tuesday, with commodities-related stocks leading the market
higher after the prices of major metals and crude oil rose on a
The pan-European STOXX 600 index was up 1.2 percent
by 0831 GMT after closing 0.7 percent lower in the previous
session. However, the benchmark index is still down nearly 7
percent so far this year.
The market was helped by a rally of 2.4 percent in the STOXX
Europe 600 Basic Resources index, the top sector gainer,
as copper rose after the dollar eased from seven-month highs.
Other metals, including gold, also rose as a weaker
dollar made commodities cheaper for other currency holders.
The European oil and gas index also increased 1.5
percent on the currency moves and comments from some analysts
markets might not be quite as over-supplied as thought.
"The market has been trading in a sideways range for a
couple of months now. However, depressed stocks and sectors have
seen some rebound, with commodities stocks falling in that
segment," said Gerhard Schwarz, head of equity strategy at
Baader Bank in Munich.
Rio Tinto, Randgold Resources, Fresnillo
, Polymetal, Royal Dutch Shell,
Tullow Oil and BP rose 2.1 to 3.3 percent.
Danish jeweller Pandora rose 5.7 percent, the
top gainer in the STOXX 600 index, with traders citing a bullish
survey from Swedish broker Carnegie.
On the downside, Burberry fell 7 percent, even
after the British luxury fashion label reported a
better-than-expected rise in second-quarter retail sales.
Traders said the stock was hit by some negative broker
notes. The group's total sales also fell 4 percent on an
underlying basis in the six months to end-Sept, hit by a fall in
wholesale and licensing revenues.
"FX benefits aside, Burberry struggles to drive meaningful
growth," Liberum analysts said in note, adding that its
valuation was at a premium.
Before Tuesday's fall, Burberry shares had jumped nearly 50
percent since June.
French testing, inspection and certification company Bureau
Veritas fell 4.5 percent after the company cut its
outlook for full year 2016 as the weakness in the oil and & gas
and shipping markets weighed on its revenue.
(Editing by Andrew Heavens)