Europe close: Mining stocks gain despite US fiscal cliff woes

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LONDON (ShareCast) - - Mining stocks among best performers
- US fiscal cliff concerns continue to weigh heavy on lawmakers
- Italian Prime Minister Mario Monti meeting with prospective coalition partners

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European equities rose modestly at close of business Thursday with mining stocks among the best performers of the day.

Mining companies of metals and raw materials climbed on the back of an increase in copper prices. Iron ore prices also reached an eight-month high, bolstered by a hike in Chinese demand.

Russian steelmaker Evraz advanced 3.7% to 263.7p. Kazakh copper miners Eurasian Natural Resources and Kazakhmys (LSE: KAZ.L - news) increased 4.1% to 290.7p and 2.5% to 789p respectively.

Major mining companies Rio Tinto (Xetra: 855018 - news) and BHP Billiton (NYSE: BBL - news) gained 2% to £35.79 and 1.5% to £21.71.

Investors put their faith in the industry despite concerns over the impending fiscal cliff in the US.

Lawmakers have returned to Washington Thursday after the Christmas holiday to reach a budget deal in the hopes of avoiding $600bn in spending cuts and tax hikes in the country.

A press conference addressing the issue will be held later Thursday.

In another meeting that may shape the future of the economy, Italian Prime Minister Mario Monti is convening with prospective coalition partners to discuss his offer to lead an alliance into elections in February.

He is yet to confirm whether he will seek a second stint as a leader but if he decides to bite the bullet, it could set the stage for confrontation with Silvio Berlusconi in his attempt to return to power.

Retail stocks fall

Retail-facing stocks declined as the British Retail Consortium said high street spending leading up to Christmas had been lower-than-expected.

Among the retailers was alcoholic drinks maker Diageo (LSE: DGE.L - news) which fell 1% to £18.09. Consumer products (Other OTC: CPSV - news) group Reckitt Benckiser (LSE: RB.L - news) declined by 1.1 % to £39.03, while Tesco (Other OTC: TSCDY - news) lost 0.6 % to 336.5p and clothing retailer Burberry fell 0.7 per cent to £12.31.

However analysts predict business will pick up during post-Christmas sales.

Modest gains for euro against dollar

The euro edged up 0.08% to the 1.3235 dollar at close Thursday.

Front month Brent crude futures fell by 0.334 to the 110,700 dollar mark on the ICE.