European stocks bounce back from 2½-month low

Eurostoxx 50: 2,733.95 (+1.41) Frankfurt DAX: 7,085.14 (+15.24) Paris CAC: 3,807.61 (+2.52)

EUROPEAN STOCKS advanced yesterday, rebounding from a 2½-month low, led by a rally in Eurasian Natural Resources as investors speculated that the mining company may receive a takeover approach.

“We still see 10 per cent index upside,” wrote Gary Baker, the London-based head of European equities strategy at BofA Merrill Lynch Global Research in a report to clients. “While the near-term directions for markets still look broadly sideways, our belief in a better second-half performance anticipates a bottoming out in US growth expectations and a diminishing risk of a hard landing in China.”

Markets in Austria, Denmark, Greece, Iceland, Norway and Switzerland were closed for a public holiday.

Luxembourg’s Jean-Claude Juncker said a bailout for Greece must include “voluntary” investor participation and meet the approval of central bankers. Mr Juncker, who leads the group of euro-area finance ministers, made the comments in an interview on Radio Berlin-Brandenburg on June 11th.

ENRC led mining companies higher, surging 4.7 per cent to 776.5p, its biggest gain in seven months, after the Sunday Times reported that Glencore may bid for the producer of metals in Kazakhstan.

Glencore gained 2.8 per cent to 523.4p.

Kazakhmys, Kazakhstan’s biggest copper producer, increased 2.2 per cent to 1,235p.

Banco Popolare climbed 1.3 per cent to €1.61 in Milan.

Lloyds Banking rose 1.4 per cent to 47.6p. The Sunday Times reported that the bank may cut 15,000 jobs to save £1 billion ($1.6 billion) to be announced by executive officer Antonio Horta-Osorio on June 30th.

Peugeot Carnival fell 2 per cent to 2,254p after the world’s biggest cruise-ship operator said popular revolts in the Middle East and north Africa and the earthquake in Japan will cost the company 15 cents a share in the second half of 2011.

Renault, which owns a 43 per cent stake in Japan’s Nissan Motor, fell 1.6 per cent to €35.82 after Citigroup lowered its recommendation for the car maker to “hold” from “buy”.

Imperial Tobacco slid 1.4 per cent to 2,056p. – (Bloomberg)