Sun, Jul 29, 2012 - Page 15 News List

European stocks advance for eighth straight week

Bloomberg

European stocks rose for an eighth week as German Chancellor Angela Merkel and French President Francois Hollande joined European Central Bank President Mario Draghi in promising to do everything to protect the euro.

Banco Santander SA jumped 14 percent as Spanish lenders led gains on the benchmark STOXX Europe 600 Index. Barclays PLC, the British lender fined for rigging LIBOR, climbed 4.9 percent as it posted first-half profit that beat analysts’ estimates.

The STOXX 600 added 0.6 percent to 259.81 this past week, its eighth consecutive advance for the longest stretch of weekly gains since January 2006.

The gauge has rebounded 11 percent from this year’s low on June 4, as central banks from Europe to China eased monetary policy to help spur economic growth. The STOXX 600 has risen 3.4 percent so far this month.

“The real focus for aeveryone is Europe and the comments made by Draghi and Merkel,” said Chris Beauchamp, a market analyst at IG Index in London. “They make a strong defense of the euro, but if you do not see these words backed up with real action, disappointment could quickly set in.”

The ECB may begin a new round of joint-bond purchases to ease borrowing costs in Spain and Italy, as Merkel and Hollande pledged to do everything to protect the euro.

“France and Germany are fundamentally attached to the integrity of the euro zone,” the two leaders said in a joint statement on Friday. “They are determined to do everything to protect it.”

The leaders of the euro area’s two biggest economies issued their statement a day after Draghi said that the central bank would act to preserve the euro.

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” Draghi said in a speech in London. “And believe me, it will be enough.”

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