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Markets

European shares pushed down by weak commodity prices

Published December 30, 2015 Updated December 30, 2015 08:24pm

imageLONDON: European stock markets fell on Wednesday as weak commodity prices hit the shares of mining and energy companies.

Online supermarket group Ocado also underperformed, with its shares sliding 3.3 percent on concerns over growing competition from a rival service at Amazon.

The pan-European FTSEurofirst 300 index was down 0.5 percent at its close, while the euro zone's blue-chip Euro STOXX 50 index fell 0.8 percent, surrendering ground after rising in the previous session.

Britain's FTSE 100 index of leading shares fell 0.6 percent while Germany's DAX was down 1.1 percent.

"The ongoing weakness in the oil price is dragging down the markets," said John Plassard, senior equity sales executive at Mirabaud Securities.

Brent crude oil slid back towards 11-year lows on Wednesday as U.S. stockpiles swelled and Saudi Arabia reiterated a commitment to keep pumping oil.

Crude prices have plunged by two-thirds since mid-2014 as soaring output from the Organization of the Petroleum Exporting Countries, Russia and the United States led to a global surplus of between half a million and 2 million barrels per day.

This caused the shares of oil companies such as BP and Total to fall, while British mining stocks also slid lower as metal prices fell due to persistent concerns about a slowdown in China, the world's biggest consumer of metals.

Spreadex analyst Connor Campbell added that a warning by the head of the International Monetary Fund in a newspaper column of disappointing global economic growth next year was adding further pressure on the markets.

In positive territory on Europe's STOXX 600 index, however, was biometric technology company Fingerprint Cards , which soared 13 percent in the last trading session before it was due to be upgraded to Sweden's blue-chip index .

Britain's FTSE is down around 4 percent since the start of 2015, having lost ground from a record high reached in April.

However, stock markets in continental Europe have fared better, thanks partly to economic stimulus measures from the European Central Bank.

The FTSEurofirst 300 is up around 6 percent in 2015, while the DAX is up 10 percent.

Copyright Reuters, 2015

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