(RTTNews) - The European markets fell for the second day on Wednesday, as a report showing an unexpected drop in U.S. housing starts offset a rally among mining stocks.

The U.S. Commerce Department said in its report that housing starts fell 10.6% to an annual rate of 529,000 in October from the revised September estimate of 592,000. The drop surprised economists, who had expected starts to edge up to 600,000 from the previous month's initial estimate of 590,000.

Crude for December delivery rose $0.41 at $79.55 a barrel on the New York Mercantile Exchange, by the time the European markets closed.

The FTSEurofirst 300 index of pan-European blue chips closed 0.28% lower at 1,027.16 points, while the narrower DJ Stoxx 50 index fell 0.37% to 2,527.49 points.

Around Europe, the U.K.'s FTSE 100 index fell 0.07% to 5,342.13 and France's CAC 40 index declined 0.02% to 3,828.16, while Germany's DAX index rose 0.16% to 5,787.61.
German drugs and chemicals maker Bayer slipped 2.8% as International Petroleum Investment Co. denied a report that Bayer is an acquisition target.

Morrison, Britain's fourth largest grocer, dropped 5% after its Chief Executive Officer Marc Bolland resigned to join clothing retailer Marks & Spencer, whose shares climbed 5.9%.

Wolseley, the world's largest supplier of heating and plumbing gears, fell 3.6% after the company said pre-tax profit from continuing operations before items for the first quarter declined 45% from a year ago and group revenue for the period dropped 13%.

Mining stocks gained after metals prices advanced. BHP Billiton, the world's biggest miner, rose 1.6%, while Rio Tinto, the third biggest, climbed 2.40% and copper miner Antofagasta surged up 1.9%.

Cadbury rose 1.2% after after U.S. chocolate maker Hershey Co. and Italian chocolate maker Ferrero SpA announced that they are reviewing their options over a potential offer for the British confectioner.

by RTT Staff Writer

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