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European bourses close higher on mining stocks

European stocks ended slightly higher on Friday as gains for mining stocks offset a weaker banking sector, but profit-taking capped gains after a three-day rally from lows for the year.

"After the welcome recovery in equity markets this week, the momentum is feeling a little jaded," said Barclays Private Clients analysts.

"Earnings have been good, but oil prices continue to intensify the downside risks and there is renewed talk about institutional selling of equities," they added.

The Dow Jones Stoxx 600 Index, which tracks Europe's 600 largest listed companies, was up 0.2 percent at 236.68. The Dow Jones Euro Stoxx Index, which tracks companies in countries that joined the common currency, was 0.2 percent higher at 222.69.

Mixed US economic data also kept investors wary of adopting aggressive positions before the weekend.

An unexpectedly weak reading of GDP showed the US economy grew by only 3 percent versus expectations of a 3.7 percent uptick during the second quarter.

"The big question is whether this slowdown will continue," said Steve Barrow, strategist at Bear Stearns.

Data due next week are likely to provide further food for thought as the key US payrolls report for last month and further manufacturing gauges will come under the spotlight.

Any significant disappointment could fuel increased speculation among investors that the recent soft US data is more than just a temporary blip.

On the corporate earnings front on Friday, financials were in focus. Deutsche Bank led decliners in Frankfurt, where it was down 2.2 percent at 9.40 after reporting that a fall in investment banking revenues produced a lower-than-expected increase in second-quarter profits.

In London, Lloyds TSB said first-half net profit fell after the sale of international businesses, but that its domestic performance is meeting the bank's goals. Shares retreated 0.4 percent to £4.12.

French bank Societe Generale managed to buck the sector trend after it posted unexpectedly strong second-quarter results, with the much-anticipated decline in corporate banking income offset by lower loan-loss provisions. Shares gained 0.3 percent to US$81.8 in Paris.

Mining stocks were higher across the board, with Anglo American leading gainers in London by rising 2 percent to £11.68. Rio Tinto was up 1.5 percent at £14.33 after reporting upbeat results the previous session.

Providing a boost to the steel sector, Arcelor reported an almost-quadrupled second-quarter net profit. It said it expected full-year earnings to be higher than last year as it pushes ahead with further price hikes and cost cuts during the next two quarters.

German retail giant Metro was also a session outperformer, rising 3.3 percent to US$45.75. It reiterated its outlook for this fiscal year after posting a jump in sales and profits for the second quarter.

London's FTSE-100 Share Index was 0.12 percent lower at 4,413.1, while in Paris the CAC-40 Index was 0.09 percent higher at 3,647.10. Frankfurt's Xetra Dax Index was up 0.15 percent at 3,895.61.
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