Equities fall on global commodity storm

European stocks lost ground Wednesday with miner Anglo American, at the centre of a global "commodity storm", striking new historic lows before an afternoon fightback, dealers said.

Markets had opened with slender gains after the previous day's heavy commodity-fuelled losses, but stumbled once more as investors eyed a fresh collapse in Anglo's shares.

A modest recovery in oil prices -- with Brent crude bobbing back above $40 per barrel -- was shrugged off by markets, which also remain anxious over China's ongoing economic woes.

"This morning?s tentative gains look like they were a mere stop-gap, the brief calm before the resumption of the commodity storm," said Spreadex analyst Connor Campbell.

"With little to distract investors, it?s hard not to linger on the whopping 85,000 jobs Anglo is set to slash -- and, of course, that suspended dividend."

Anglo American struck a new all-time low at 277.6 pence, but later recovered ground to close off by 1.2 percent at 319.7 a day after the firm announced an "accelerated and more radical restructuring programme" designed "to transform the Company?s competitive position.

Anglo had revealed plans Tuesday to slash its workforce from 135,000 staff to 50,000 after 2017, adding that it would suspend dividend payments until the end of next year in response to collapsing commodity demand and prices.

Noting the recovery of miners, James Hughes of GKFX identified a "relative calm ahead of the next week's key Fed interest rate decision."

At the close in London, the FTSE 100 index was 0.14 percent down after earlier small gains while Frankfurt fell 0.6 percent despite Volkswagen's strong 6.2 percent rally on a report that allegations it lied over carbon dioxide emissions were unfounded.

Paris shed 0.9 percent in value.

This week's Anglo news has prompted heightened worries about the outlook for mining and metals companies across the world, dealers said.

?Equities (are) on another downer as the commodity sector remains under considerable pressure, the Anglo American dividend cut rippling through and generating uncertainty about income sustainability elsewhere," said Mike van Dulken, head of research at traders Accendo Markets.

Steelmakers lost ground early in the session but fought back. ArcelorMittal shed 2.4 percent before ending up 3.5 percent in Paris, and ThyssenKrupp ended up 0.1 percent after first losing 0.9 percent in Frankfurt.

In Asia meanwhile, China's ongoing economic woes cast a pall over the region's trading floors after a downturn on Wall Street, but rising oil prices gave some respite for energy firms.

However, the oil market is still struggling around seven-year lows and analysts said the gloom was likely to last for some time.

"We believe that the current crude oversupply in the global market will persist over the coming years, reinforcing our flat outlook for oil prices over 2015-2017," BMI Research said in a market commentary.

A global supply glut, weak demand and the growth slowdown in China have combined with soaring production to send crude slumping more than 60 percent over the past 18 months.

US stocks dipped in early trading with the Dow Jones Industrial Average off 0.22 percent, before edging up to be almost unchanged mid-session while the broad-based S&P 500 and the tech-rich Nasdaq Composite Index each lost 1 percdent.

But news of a possible mega-merger lifted DuPont 9.4 percent and Dow Chemical 10.3 percent as the pair consider combining to create the world's biggest chemical company with annual sales of more than $90 billion.

The Tokyo stock market closed 1.0 percent lower, Sydney fell 0.3 percent and Hong Kong lost 0.5 percent, while Taipei, Singapore and Kuala Lumpur were also in negative territory.

However, Shanghai rose 0.07 after a slightly better-than-forecast inflation reading for November, and on hopes of new stimulus measures for the world's number two economy.

In foreign exchange activity on Wednesday, the euro climbed against the dollar.

- Key figures around 1630 GMT -

London - FTSE 100: DOWN 0.2 percent at 6,127 points

Frankfurt - DAX 30: DOWN 0.6 percent at 10,611

Paris - CAC 40: DOWN 1.0 percent at 4,637

EURO STOXX 50: DOWN 0.4 percent at 3,286

Tokyo - Nikkei 225: DOWN 1.0 percent at 19,301.07 (close)

New York - Dow: UNCHANGED at 17,567

Euro/dollar: UP to $1.0983 from $1.0892 late in New York on Tuesday

Dollar/yen: DOWN to 122.60 yen from 122.97 yen