European stocks posted their biggest weekly gain this year, sending the STOXX Europe 600 Index to its highest level in six months, as manufacturing increased globally and the US jobless rate fell to the lowest in three years.
Xstrata PLC and Glencore International PLC surged more than 13 percent after the world’s largest publicly traded commodities trader held talks to buy the Zug, Switzerland-based mining company. Temenos Group AG rallied 20 percent as Misys PLC, the British maker of software for banks, said it has held talks about a merger with the Swiss company.
The STOXX 600 climbed 3.6 percent to 264.6 this week, extending last month’s rally of 4 percent that was the best start to a year since 1998. The equity gauge has gained 8.2 percent this year and is up 23 percent since its two-and-a-half-year low on Sept. 22.
“We had a very good week,” Veronika Pechlaner, who helps manage ￡1.1 billion (US$1.7 billion) at Jersey, Channel Islands-based Ashburton Ltd, said in a telephone interview. The US employment numbers “are providing more hope to the market that the recovery in the US is not only on track, but maybe accelerating a little bit.”
The STOXX 600 surged 2 percent on Wednesday, the most in six weeks, as gauges of manufacturing increased from the US to China.
The Markit Economics final purchasing managers’ index, a gauge of manufacturing in the eurozone, climbed to 48.8 last month from 46.9 in the prior month. A UK manufacturing index also jumped to an eight-month high.
The European stocks gauge rallied 1.7 percent on Friday after US Labor Department figures showed employment climbed more than forecast, with a 243,000 increase in payrolls.
All 19 industry groups in the STOXX 600 gained more than 1.2 percent.