By Carla Mozee, MarketWatch

Eurozone manufacturing PMI reaches 34-month high

European stocks had trouble finding firm direction Wednesday, with mining shares strengthening while Italian stocks were under stress.

The Stoxx Europe 600 was darting in and out of positive territory. It turned down 0.2% to reach 340.40, but a gain at day's end would mark the index's third consecutive win. The pan-European benchmark on Tuesday rose 0.2% (, aided by a rise in mining shares.

On Wednesday, basic materials , oil and gas and utility shares put in the best performances, but financial and tech shares struggled.

Miners move up: Mining stocks advanced as iron ore prices swung higher. Goldman Sachs upgraded its price forecasts over the next three, six and 12 months for the metal. Its analysts said in a research note Wednesday that the 2016 iron ore market has "benefitted from better fundamentals and favorable technicals."

Shares in BHP Billiton (BLT.LN) (BHP.AU) (BHP.AU) picked up 2.1%, while Anglo American PLC (AAL.LN) and Rio Tinto PLC (RIO) (RIO) (RIO) each added 1%.

Gains for miners helped lift the U.K.'s FTSE 100 by 0.6% to 6,861.86 ( Investors will be watching for what Chancellor of the Exchequer Philip Hammond has to say about the U.K.'s spending and taxation plans when he presents his "autumn statement" ( to parliament. He is scheduled to appear at 12:30 p.m. London time, or 7:30 a.m. Eastern Time.

The pound was trading at $1.2374, down from $1.2417.

Italian stocks decline: Italy's FTSE MIB was dragged down the most among major European indexes, falling 1.1% to 16,343.51.

Investors "remain fixed on the upcoming Italian referendum on Dec. 4, and we are seeing a sharp increase in orders targeting a weaker euro," said Nawaz Ali, currency strategist at Western Union Business, in a note.

Polls suggest voters will reject proposed changes to Italy's constitution, and that could indefinitely sideline fiscal reforms and lead to the dissolution of the government led by Prime Minister Matteo Renzi.

See:All the potential political risks looming in Europe, in one chart (

Banking shares, which have been saddled by concerns about non-performing loans, bore the brunt of the losses in Italy. Banca Popolare di Milano (PMI.MI) slumped 4.3%, Banco Popolare Societa Cooperativa (BP.MI) lost 4.2%, Mediobanca SpA (MB.MI) moved 3.9% lower, and UniCredit SpA (UCG.MI) shed 3.2%.

Assicurazioni Generali SpA (G.MI) shares were off 4%. The Italian insurance company said it will accelerate a strategic turnaround ( it launched last year, by exiting unprofitable businesses and cutting operating costs.

Indexes: Germany's DAX 30 was down 0.3% at 10,682.23, while France's CAC 40 shed 0.3% to 4,536.09.

Economic docket: Stocks overall were little changed after preliminary eurozone figures ( on manufacturing and services activity in November beat expectations. IHS Markit said its flash eurozone manufacturing PMI was 53.7 in November, a 34-month high. Analysts polled by FactSet had expected a reading of 53.4. The services PMI came in at 54.1, above an estimate of 52.9.

The euro edged down to $1.0603 after the data, compared with $1.0627 late Tuesday.

(END) Dow Jones Newswires

November 23, 2016 05:52 ET (10:52 GMT)

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