European Stocks Fluctuate Before ECB; U.S. Index Futures Gain

By Daniela Silberstein

Sept. 3 (Bloomberg) -- European stocks fluctuated before the European Central Bank’s meeting on interest rates. Asian shares rose and U.S. index futures gained as Alcoa Inc. said Chinese aluminum demand will increase and investors speculated the contraction in American service industries slowed.

Xstrata Plc and Antofagasta Plc advanced more than 1.3 percent after metals rose in London and Alcoa boosted its forecast for global aluminum consumption. Alcoa added 1 percent in German trading. Newcrest Mining Ltd., Australia’s largest gold miner, climbed 7.7 percent after the metal surged the most in more than five months yesterday.

Europe’s Dow Jones Stoxx 600 Index was little changed at 8:39 a.m. in London. The gauge has slumped 2.9 percent this week on concern that a six-month, 46 percent rally has outpaced the prospects for earnings and economic growth. The regional measure is valued at 48.6 times profit, the highest level since June 2003, according to weekly data compiled by Bloomberg.

The MSCI Asia Pacific Index added 0.2 percent. China’s Shanghai Composite Index surged 4.8 percent, the biggest rally since March, on speculation regulators will adopt measures to boost equities following declines in the past month.

Futures on the Standard & Poor’s 500 Index climbed 0.5 percent. The benchmark gauge for U.S. equities slid for a fourth straight day yesterday, the longest losing streak since May, as reports on job losses and factory orders spurred concern that the economy is struggling to recover.

Fed, ISM Services

The Federal Reserve expressed “considerable uncertainty” about the strength of the economic recovery, minutes of its August meeting showed yesterday, while U.S. Treasury Secretary Timothy Geithner told reporters in Washington that it was too soon to remove policies aimed at boosting growth.

A report today may show U.S. service industries shrank at a slower pace in August. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 48 -- the highest level in 11 months -- from 46.4 in July, according to the median forecast in a Bloomberg News survey. Readings below 50 signal contraction.

Data from the Labor Department may show that first-time claims for jobless benefits fell to 565,000 last week from 570,000 the week before, according to economists’ estimates.

ECB Meeting

The European Central Bank will leave interest rates at a record low of 1 percent today and signal it’s in no rush to withdraw emergency stimulus measures as the economy shows signs of recovering, economists said. The central bank, led by President Jean-Claude Trichet, won’t raise rates before the third quarter of 2010, another survey shows.

Xstrata rose 2.4 percent to 797.5 pence and Antofagasta gained 1.3 percent to 720 pence. Copper, lead, nickel and aluminum rose today on the London Metal Exchange.

Newcrest climbed 7.7 percent to A$31.85, while Lihir Gold Ltd., Australia’s second-biggest gold-mining company, jumped 7.2 percent to A$2.98. Zijin Mining Group Co., China’s largest gold mine, surged 9.2 percent to HK$6.92 in Hong Kong.

A weaker dollar spurred demand for gold as an alternative investment yesterday, sending the metal up 2.3 percent in New York.

Klaus Kleinfeld, chief executive officer of Alcoa, the largest U.S. aluminum producer, said in an interview in New York that China’s consumption of the lightweight metal will rise 4 percent this year. The company had previously predicted zero growth. Alcoa added 1 percent to $11.66 in Germany.

BASF SE slid 2.1 percent to 35.14 euros. Nomura Holdings Inc. cut the world’s largest chemical company to “reduce” from “neutral” because margins may decline next year.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.