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European mining stocks fall after soft China data; oil stocks extends losses

European stocks fell Monday, with shares of natural-resource producers struggling after soft economic data from China and a fresh selloff in oil prices.

Investors also weighed a fresh round of economic data from throughout Europe, highlighted by further slowing in manufacturing activity in the eurozone. Data firm Markit said its monthly survey of purchasing managers fell to 50.1 in November, down from a preliminary estimate of 50.4. The data arrive as European Central Bank officials have indicated it may set up stimulus efforts to battle low inflation and stagnating economic growth.

Markets: Mining stocks slumped, with two measures of manufacturing activity in China — a key buyer of commodities — indicating further weakness in the world’s second-largest economy. HSBC early Monday said its China purchasing managers index fell to a six-month low of 50.0, from 50.4 in October. Meanwhile, China’s official PMI fell to 50.3 from 50.8 in October, the lowest level since March.

In the space, iron-ore heavyweight BHP Billiton PLC BLT, -2.74% BHP, -2.38% BHP, -5.34% shares fell 2.8%, Antofagasta PLC ANTO, -2.04% lost 2.7%, Anglo American PLC AAL, -2.31% dropped 2.6% and Rio Tinto PLC RIO, -1.47% gave up 1.7%.

Oil prices, meanwhile, extended losses from Thursday’s session when the Organization of the Petroleum Exporting Countries failed to agree to an output cut. U.S. crude-oil futures CLF5, -0.67% were down 1.5% though they recaptured the $65-a-barrel level.

The European oil exploration and production space has fallen roughly 35% this year, tracking the recent sharp slide in the oil price, and “while this has been an uncomfortable ride, downside risks remain, in our view,” said analysts at J.P. Cazenove, in an note Monday.

The sector is likely to face oil prices sitting below $90 a barrel for at least the next six to 12 months, or longer, and the weaker prices come at a time that “balance sheets are more stretched than at any point in recent memory given investments in projects sanctioned with $100 a barrel in mind”, the analysts added.

J.P. Morgan Cazenove said oil and gas producer Afren PLC AFR, -10.01% is among the companies whose shares are most heavily exposed to the decline in oil prices. It cut Afren to an underweight rating from overweight, prompting Afren shares to drop 6.2%, leading decliners on the Stoxx Europe 600. Tullow Oil PLC TLW, -6.15% fell 5.8% as its rating was cut to neutral from overweight.

Overall, the Europe 600 index SXXP, -0.41% fell 0.4% at 345.87, off session lows as the consumer-services group and utilities moved higher. Shares of E. ON SE EOAN, +4.49% climbed 4.1% as the German utility plans to split into two companies.

Germany’s DAX 30 DAX, -0.25% fell 0.4% to 9,945.03 and France’s CAC 40 index PX1, -0.39% lost 0.4% at 4,370.77. The U.K.’s FTSE 100 index UKX, -0.92% declined 0.8% to 6,669.89. Italy’s FTSE MIB FTSEMIB, -1.43% moved down 1.6% following confirmation that Italy’s gross domestic product slipped back into recession in the third quarter.

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