European stocks advanced for a fourth week, for the longest rising streak since December, as investors speculated that European leaders meeting in Brussels this week will nudge forward a solution to the region’s debt crisis.
SGL Carbon SE soared the most since 2008 after a report that Bayerische Motoren Werke AG plans to buy a stake in it. Lundin Petroleum AB surged 14 percent after Statoil ASA doubled its estimate of an oil discovery in the North Sea. G4S PLC slumped 14 percent after agreeing to acquire ISS A/S, a move resisted by at least one large shareholder.
The STOXX Europe 600 Index advanced 0.2 percent to 238.93 this week, with energy, personal goods and retail industries gaining the most.
The gauge trimmed its decline from this year’s high on Feb. 17 to 18 percent. The STOXX 600 is trading at about 10 times the estimated earnings of its constituent companies, near the lowest valuation since March 2009, according to data compiled by Bloomberg.
“We have gone through periods of hope and depression this week regarding a solution for the euro area,” said John Plassard, director at Louis Capital Markets in Geneva. “Investors expect a lot from this meeting. The crucial point of the meeting will be to see if there is a perfect agreement between Germany and France.”
Eurozone leaders will meet today and on Wednesday to discuss their response to the debt crisis, including a plan to deploy US$1.3 trillion by combining the EU’s temporary and planned permanent rescue funds as of mid-next year, two people familiar with the discussions said. A hurdle to the talks is a disagreement between Germany and France over the European Central Bank’s role.
Bank of America Corp said a majority of 136 investors it surveyed expected the summit to take the next step toward ending the crisis, but not provide a complete solution. Two out of five respondents expected a sensible plan to emerge.
National benchmark indexes rose in nine of the 18 western European markets. The UK’s FTSE 100 added 0.4 percent. Germany’s DAX Index gained less than 0.1 percent and France’s CAC 40 dropped 1.5 percent.
SGL Carbon soared 19 percent, the biggest weekly gain since November 2008. BMW plans to buy a stake in the German maker of carbon and graphite materials, Der Spiegel said, citing an unidentified manager at the carmaker.
Lundin jumped 14 percent after Statoil doubled its estimate for a North Sea discovery. The Aldous Major South find may hold 900 million to 1.5 billion barrels of recoverable oil equivalent, twice as much as Statoil’s previous estimate. Combined with Lundin’s neighboring Avaldsnes, the field may hold as much as 3.3 billion barrels of recoverable resources.
G4S slumped 14 percent after announcing a plan to acquire Danish cleaning-services company ISS for US$8.2 billion. Parvus Asset Management, among its largest investors, resists the deal saying it is too risky.
Some of the other 20 top shareholders in the world’s largest security services company may also vote against the move at a Nov. 2 shareholders’ meeting, Parvus fund manager Edoardo Mercadante said.
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