December 28, 2016 / 11:04 AM / a year ago

Miners' rally supports European shares in quiet holiday trade

* Live markets: cpurl://apps.cp./cms/?pageId=livemarkets

* Pan-European STOXX index up 0.1 percent

* Miners underpin market, set to gain 60 pct in 2016

* Mid-caps Bovis slumps after profit warning

* Italian banks Banco Popolare, Pop Milano under pressure

By Danilo Masoni

MILAN, Dec 28 (Reuters) - European shares inched up in quiet festive trade on Wednesday with stronger mining stocks underpinning the broader market while British house-builder Bovis Homes slumped on a profit warning.

The STOXX Europe 600 was up 0.1 percent, while Britain’s FTSE, which reopened on Wednesday after a Christmas break, outperformed with a gain of 0.3 percent thanks to its heavy exposure to mining stocks.

The Basic Resources STOXX index led sectoral gainers with a rise of 2.5 percent on the back of firmer metal prices. The index is on track to end the year with a rise of 61 percent, helped by a recovery in commodity prices, better balance sheets and expectations of fiscal stimulus in the United States.

Miners BHP Billiton, Anglo American rose 4.2 and 3.2 percent respectively. Precious metal minders Fresnillo and Centamin were also in demand as gold prices extended gains thanks to technical reasons.

“The yellow metal is in demand and could be set for a successful test above the $1150 resistance,” said London Capital Group analyst Ipek Ozkardeskaya in a note.

Top STOXX losers were merger partners Banco Popolare and Banca Popolare di Milano. The two Italian lenders were both down 2.7 percent. One Milan-based trader said the stocks were hit by concerns over bad loans coverage levels.

Spanish airport operator Aena fell 1.4 percent after online newspaper El Confidencial reported the company would be forced to cut tariffs it applies to airlines by 2 percent a year in 2017-2021.

Outside the STOXX , Bovis fell 4.2 percent after saying it would not deliver the number of houses it originally expected in 2016, resulting in a likely miss against market profit forecasts.

In spite of the drop, which made Bovis the worst performer on Britain’s midcap index, analyst at Numis kept their buy rating saying they expected the company to be better placed to deliver next year.

Apart from miners, price moves in other sectoral indexes were small - between a gain and a fall of 0.5 percent - in muted holiday season activity.

Turnover on the STOXX index dropped to 8.3 billion euros on Tuesday compared to an average of 26.7 billion euros over the last month. The pan-European index is set to end the year with a fall of 1.5 percent. (Reporting by Danilo Masoni; editing by John Stonestreet and Janet Lawrence)

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