European Mining Stocks, BHP Rise; Alcatel, GlaxoSmithKline Fall

European mining stocks rose as gold climbed to a two-month high in Asia and copper prices gained. Anglo American Plc and BHP Billiton, the world’s biggest mining companies, paced the advance.

Alcatel SA led export stocks lower after the dollar dropped against the euro. GlaxoSmithKline Plc paced a decline by drugmakers for a third day.

The Dow Jones Stoxx 600 Index rose less than 0.1 percent to 359 at 11:12 a.m. in London. The Stoxx 50 and the Euro Stoxx 50, a measure for the 12 nations sharing the euro, both fell less than 0.1 percent.

Stocks in Europe have retreated from a six-year high reached earlier this week on concern a Democrat-controlled U.S. Congress will pass legislation that hurts earnings. Higher oil prices and weaker-than-expected consumer confidence figures yesterday rekindled speculation spending won’t support growth in the world’s largest economy.

“The market is taking a breather,” said Klaus Hagedorn, who manages about $836 million at Metzler Investment GmbH in Frankfurt. “A mix of negative news including the rising oil price animated investors to take profits.”

National benchmarks fell in 12 of the 18 western European markets. The U.K.’s FTSE 100, France’s CAC 40 and Germany’s DAX were little changed.

Anglo American Plc, the world’s second largest mining company, rallied 2.4 percent to 2,526 pence. BHP Billiton, the biggest, advanced 1 percent to 1,053 pence. Xstrata Plc, which owns the world’s largest zinc smelter, increased 1 percent to 2,377 pence.

Gold, Copper Gain

Gold rose in Asia to a two-month high on speculation China, the 10-biggest holder of gold reserves, will boost purchases of the precious metal to diversify its foreign-exchange reserves.

Copper futures advanced in Shanghai from a two-month low following gains in London and as investors boosted purchases of a broad range of commodities, including base and precious metals. Aluminum also rose.

Alcatel SA, the biggest provider of broadband Internet gear, slid 1 percent to 10.30 euros. Alcatel makes about 14 percent of its revenue in the U.S.

The dollar weakened on speculation central banks will slow purchases of U.S. assets as interest rates rise in Europe and Japan. The dollar dropped to $1.2868 against the euro from $1.2829 yesterday in New York, the weakest since Sept. 5.

Bank of China

People’s Bank of China Governor Zhou Xiaochuan said yesterday the central bank plans to diversify the nation’s $1 trillion in foreign-exchange reserves, the majority of which are in the U.S. currency. Zhou said today China has no plan to change policy or speed up diversification.

Glaxo, Europe’s largest drugmaker, lost 1.7 percent to 1,362 pence. Novartis AG, the world’s fourth-largest pharmaceutical company, retreated 1.5 percent to 73.65 Swiss francs. AstraZeneca Plc, the U.K.’s second-largest drugmaker, slid 2.3 percent to 3,003 pence.

Drugmakers, the worst-performing group among the 18 industries in the Stoxx 600 this week, have fallen on speculation a Democrat-controlled Congress will reduce subsidies for medicine. U.S. health-care stocks in the S&P 500 Index fell the most in three years yesterday after Democrats clinched majorities in both houses of Congress for the first time since 1994.

Downgrade

Deutsche Telekom AG lost 2.1 percent to 13.19 euros after UBS AG lowered its stock recommendation for Europe’s largest telephone company to “reduce” from “neutral” and cut its price estimate to 12.2 euros from 12.5.

“After a 25 percent rise from its lows we feel Deutsche Telekom, despite the renewed focus, has run ahead of its fundamentals,” analysts including David Brundish wrote in a report published today.

Rhodia SA, France’s largest maker of specialty chemicals, gained 3.2 percent to 2.28 euros. The company reported a third- quarter profit of 70 million euros ($90 million), after it cut jobs and passed on raw-material costs to clients. That compares with a loss of 122 million euros a year earlier and beats analysts estimates of 14 million euros.

Of the 33 members of the Stoxx 50 that have reported third- quarter earnings, 63.6 percent beat estimates, helping to lift stocks to a six-year high this week. Better-than-anticipated earnings and takeovers have bolstered confidence in equities.

Trumping Bid

John Laing Plc, the U.K. developer of schools, hospitals and roads, gained 2.7 percent to 419 euros. Henderson Group Plc’s private-equity arm increased its offer for John Laing to 1 billion pounds ($1.91 billion), trumping Allianz SE’s bid for the company.

Henderson offered 405 pence a share in cash for each Laing share, it said today in a Regulatory News Service statement. That’s 20 pence more than Allianz, Europe’s largest insurer, bid on Oct. 27 and 50 pence more than Henderson original approach. Shares of Henderson lost 1.5 percent to 112.75 pence.

Bouygues SA dropped 0.9 percent to 46.20 euros even as the world’s second-biggest construction company said third-quarter sales rose 9.6 percent 7.08 billion euros. That beat analysts’ estimates of 7.03 billion euros.

In the U.S. yesterday, the Standard & Poor’s 500 Index lost 0.5 percent to 1378.33. The Dow Jones Industrial Average retreated 0.6 percent to 12,103.30, a day after closing at a record. A rally in Cisco Systems Inc. shares limited the Nasdaq Composite Index’s decline. The Nasdaq slipped 0.4 percent.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks in the region, rose 0.2 percent today. The Nikkei 225 Stock Average lost 1.3 percent.