European stocks rose, rebounding after the Dow Jones STOXX 600 Index posted its biggest annual slump on record, as higher metals prices lifted mining companies and investors speculated governments will step up efforts to revive the global economy.
Rio Tinto Group surged 14 percent, leading a rally in raw-material producers, the region’s worst performing industry group last year. BHP Billiton Ltd and Anglo American PLC added more than 8 percent as copper gained for a fourth day in London.
The Dow Jones STOXX 600 Index jumped 6.3 percent this week, extending its rise to 12 percent since Nov. 21. Stocks climbed as US president-elect Barack Obama pledged to stimulate growth with the biggest infrastructure investment since the 1950s and the Federal Reserve cut interest rates to as low as 0 percent to combat the worst financial crisis in seven decades.
“We’re turning the page,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees US$615 million. “We’ve left the page of panic and deep recession. Expectations of Obama and his plan are enormous.”
The STOXX 600 added 3.1 percent to 204.46 in London, the biggest advance on the first trading day of the year since 2003.
The gauge dropped 46 percent last year as credit-related losses and writedowns at financial firms that topped US$1 trillion pushed the US, Europe and Japan into the first simultaneous recessions since World War II.
Germany’s DAX Index added 3.4 percent as Siemens AG advanced. The UK’s FTSE 100 Index gained 2.9 percent.
All 19 industry groups in Europe’s STOXX 600 slid at least 18 percent last year. Gauges of miners and banks both retreated 65 percent as the Reuters/Jefferies CRB Index of 19 raw materials dropped a record 36 percent and credit losses at European financial firms neared US$300 billion.
Rio Tinto, the world’s third-largest mining company, added 14 percent on Friday. Rio slumped 72 percent last year.
BHP Billiton, the biggest mining company, climbed 8.6 percent. Anglo American, the fourth-largest diversified mining company, added 11 percent.
Royal Dutch Shell PLC, Europe’s largest oil company, gained 4.9 percent. BP PLC, the second-biggest, added 5.1 percent.
The benchmark index for European options declined on Friday. The VSTOXX Index slid 4.1 percent to 42.08. The gauge measures the cost of using options as insurance against declines in the Euro STOXX 50 Index.