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Europe: Share market steadies, miners under pressure

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[LONDON] European shares steadied on Tuesday after a sharp rally in the previous session, although commodities-related stocks came under pressure following a drop in mining and energy shares.

The Pan-European FTSEurofirst 300 and the Stoxx Europe 600 indexes were both up around 0.05 per cent by 0800 GMT after surging about 3.7 per cent in the previous day.

Britain's commodity-heavy FTSE 100 index dropped 0.2 per cent after a fall in the prices of industrial metals, with copper slipping 0.5 per cent on concerns about global oversupply.

Miners Anglo American, BHP Billiton and Rio Tinto fell 1.4 to 2.7 per cent.

The Stoxx Europe 600 Basic Resources index, which surged more than 4 per cent in the previous session, was down 0.8 per cent, the biggest sectoral decliner. The European energy index fell 0.3 per cent, tracking weaker oil prices.

Investors stayed cautious over buying stocks ahead of this week's vote in Britain.

Two polls on Monday suggested support for Britain staying in the European Union had recovered some ground following the murder of a pro-EU lawmaker, but a third found support for a "Brexit" ahead by a whisker.

"Brexit remains the focus as we are only two days when potentially history could be made if the UK decided to leave the EU. The situation in polls is becoming tight once again," Naeem Aslam, chief market analyst at TF Global Markets, said.

The market also awaited Federal Reserve chief Janet Yellen's two-day testimony before Congress starting later on Tuesday for hints about the timing of the next US interest rate increase.

Among other sharp movers, Kion dropped 4.7 per cent, the biggest faller in the Stoxx 600 index, after the German forklift truck maker agreed to buy Dematic in a deal valuing the logistics technology company at US$3.25 billion.

Whitbread rose 3.8 per cent after reporting a sales growth of 8 per cent in the first quarter and saying it remained confident of making good progress for the full year.

"With some analysts having made bearish calls on the outlook for the hotels business lately, the market took some reassurance from today's statement," Steve Clayton, head of equity research at Hargreaves Lansdown, said.

Bouygues rose 2.3 per cent after Kepler Cheuvreux double upgraded the French construction and telecom conglomerate to "buy" from "reduce", saying that valuations had become attractive again.