Europe close: Basic resource shares pumeled

Basic resource shares paced the decline in European stocks on Wednesday, with energy issues also under the cosh as oil prices slid.

The benchmark Stoxx Europe 600 index fell 2.3% to 320.23 and France’s CAC 40 by another 1.96% to 4,155.34 while Germany’s DAX was off by 2.64%.

Three-month copper futures recouped early losses to end the day 0.1% higher at $4,637.50 per metric tonne in LME trading.

Mike van Dulken, head of research at Accendo Markets, said equity markets were "backtracking from valiant attempts to deliver breakouts”.

“The driver? I'm afraid it's oil again, and markets are also coming round to the fact that there is a distinct absence of good news doing the rounds to keep the major indices up around recent highs. OPEC's mouthpiece Saudi Arabia has said no to global production cuts on account of a lack of trust. A freeze is about as likely given Iranian and Iraqi reluctance. Oh and the cartel's Secretary General has as good as admitted that US Shale has become the de-facto swing producer, which will only serve to hinder any oil price rally.”

Basic resources suffered the brunt of the losses, with the Stoxx 600 index for the sector left nursing losses of 6.66% by the end of trading.

Energy issues were also in the red, with the sub-index for that sector down 3.04% despite a late rebound in crude oil prices on the back of the latest weekly US government stockpile data.

Commercial stockpiles of crude oil in the States grew by 3.5m barrels to reach 507.6m in the week ending on 19 February, according to the Energy Information Administration, the statistical arm of the US Department of Energy, although product inventories all fell back.

In the previous session, Iran´s enery minister labeled proposals to cap output were “laughable”.

West Texas Intermediate was up by 0.3% at $31.96 a barrel and Brent crude was 2.06% higher at $33.97.

Despite the decidedly downbeat tone, corporate news was pretty cheery.

Wolters Kluwer rallied after Dutch business information and publishing company’s 2015 results came in better than expected.

London-listed housebuilder Barratt Developments was also on the front foot as it reported a 40% rise in first half profit.

German healthcare provider Fresenius turned around into the red by the closing bell, following early gains after saying it intends to lift 2016 net income by between 8% and 12%.

French car maker Peugeot raced ahead after it announced a return to profit in 2015, while Bouygues nudged higher after the company’s full year net profit beat analysts’ expectations.