Eurostoxx 50:2,239.14 (–0.16) Frankfurt DAX:5,643.92 (–26.15) Paris CAC:3,159.74 (+5.54)

EUROPEAN STOCKS rose for a second day yesterday, as a rally in mining companies and UK banks outweighed a bigger than forecast decline in US consumer confidence.

The Stoxx Europe 600 Index rose 1 per cent to 230.64 at the close in London, the highest in almost two weeks.

The gauge has tumbled 13 per cent this month, the biggest drop since October 2008, as European and US economic reports trailed forecasts, adding to concern that the economic recovery is at risk.

“Given the sharp drop in equities in August, I think even a moderate recession is now priced in and should not scare investors,” said Mikio Kumada, a global strategist at LGT Capital Management in Singapore.

“Even very sluggish growth will now suffice for equities to find a bottom and even rally for a while, though it will take time for the markets to reclaim old highs,” he said.

Yesterday’s gains in the Stoxx 600 were led by UK equities that missed out on Monday’s rally because of a holiday.

A gauge of basic-resources companies climbed 4 per cent as Rio Tinto, the world’s second-largest mining company, rallied 4.3 per cent to 3,673.5p.

BHP Billiton, the biggest mining company, increased 4.3 per cent to 2,042.5p, while Xstrata added 4.7 per cent to 1,025.5p.

Lonmin, the world’s third biggest platinum producer, gained 8.5 per cent to 1,275p.

Anglo American, part owner of the world’s biggest platinum and diamond producers, climbed 6.3 per cent to 2,483p and Antofagasta, a copper producer controlled by Chile’s Luksic family, gained 6.1 per cent to 1,282p.

Copper advanced to a three-week high in New York as optimism for US economic growth supported demand for industrial metals.

RBS, Britain’s biggest government-controlled bank, jumped 8 per cent to 23.64p and Barclays surged 6.7 per cent to 165.4p.

Lloyds Banking, the nation’s largest mortgage lender, rose 7.8 per cent to 32.03p.

Ipsen rallied 7.9 per cent to €23.89, the biggest gain since January, after reporting first-half net income that rose 22 per cent to €91.7 million. – (Bloomberg)