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European shares led lower by commodity stocks, gloomy BOJ view

Published 15/03/2016, 10:45 pm
© Reuters.  European shares led lower by commodity stocks, gloomy BOJ view
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* Pan-European FTSEurofirst 300 index retreats

* Miners among top decliners as metals slip

* Galenica shares slump after results (Updates prices)

By Atul Prakash

LONDON, March 15 (Reuters) - European shares retreated on Tuesday, mirroring weaker commodity prices and losses in Asia where stocks slipped after the Bank of Japan held policy steady and presented a bleaker view of the country's economy.

Six weeks after the shift to negative rates, the BOJ dropped references to taking rates down further and widened an exemption to include $90 billion in short-term funds known as money-reserve funds. BOJ is running out of monetary policy firepower, so it was not a surprise to see that there is no change to the policy this week," said Lorne Baring, managing director at B Capital Wealth Management.

"Also, China's industrial output figures at the weekend showed contraction yet again and underscore the weakness in demand from the world's second largest economy. There is still a soft demand coupled with an excess supply story in the commodities spectrum."

The STOXX Europe 600 Basic Resources index .SXPP fell 4.4 percent, the top sectoral decliner, as copper prices dropped. The European oil and gas index .SXEP was also down 1.9 percent as crude oil prices slipped.

Shares in BHP Billiton BLT.L , Glencore GLEN.L , Rio Tinto RIO.L and Antofagasta ANTO.L fell 4.2 to 10.4 percent, pressuring the pan-European FTSEurofirst 300 index .FTEU3 , which was down 1 percent at 1,343.53 points by 1142 GMT.

Investors will keep a close eye on the U.S. Federal Reserve's two-day policy meeting finishing on Wednesday and on meetings of the Bank of England and the Swiss National Bank scheduled on Thursday.

Galenica shares GALN.S slumped 10.7 percent after the healthcare company announced its results and confirmed that the division of the group into two independent listed companies was planned for the fourth quarter of this year. Traders said its shares fell as the company's outlook was vague and disappointing. the trend, French telecoms operator SFR NUME.PA rose 2 percent after saying its core operating profit grew 20 percent to 3.86 billion euros in 2015 as cost cuts offset declining mobile subscribers. mid-cap companies, British online grocery Ocado OCDO.L rose 2.9 percent after reporting higher sales growth in its first quarter. European research round-up RCH/EUROPE

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