European stocks dipped for the second day in a row yesterday, led by a fall in BP and Anglo American, with oil and gas stocks and miners tracking a further retreat in commodity prices.

Europe's DJ Stoxx basic resource sector index fell 0.8 per cent as oil prices briefly hit a 20-month low of $50.28 before edging up from that level. Copper prices also fell.

"The short-term price of oil doesn't look like it'll turn around and that's also hitting miners, which are suffering from their own woes," said a trader. "These are unloved sectors."

The pan-European FTSEurofirst 300 index ended 0.1 per cent lower at 1,510.4 points, but above the day's low of 1,504.3. The index is just below a near six-year high struck on Monday, after racking up gains of 16 per cent last year.

US stocks were little changed by the close of European markets. Earlier, global equities dipped after US data showed stronger-than-expected producer price inflation, which weakened the case for a near-term cut in US interest rates. A Merrill Lynch poll issued yesterday showed investors were steadily rasing their expectations for global economic growth but still expect it to weaken this year.

"Only 40 per cent of our panel think it likely that corporate profits can deliver double-digit growth this year," a Merrill Lynch poll of European regional fund managers said.

"Although inflation expectations did deteriorate quite a bit this month, monetary policy is only regarded as slightly stimulative. Investors continue to believe European equities to be undervalued," Merrill Lynch said.