Sun, Aug 05, 2012 - Page 15 News List

European stocks advance for ninth week on US news

Bloomberg

European stocks rose for a ninth week as US economic data surpassed estimates, outweighing comments by the US Federal Reserve and the European Central Bank (ECB) that disappointed investors looking for more definitive steps to support growth.

The STOXX 600 rallied 2.2 percent to 265.58 this week, its longest stretch of gains since January 2006. The benchmark gauge has climbed 13 percent over the nine-week period as policymakers eased repayment terms for Spanish banks and optimism grew that central banks will announce stimulus measures.

Draghi stopped short of unveiling specific steps this week, disappointing investors looking for immediate action. While signaling that the ECB would join forces with governments to buy sovereign bonds, Draghi did not detail how the plan will work.

A US report showed nonfarm payrolls in the world’s largest economy climbed more than -forecast last month. Employers added 163,000 workers last month, according to the US Department of Labor. That exceeded the 100,000 median estimate of economists surveyed by Bloomberg News.

Confidence among US consumers unexpectedly rose for the first time in five months, a report on Tuesday showed. The Confidence Board’s index increased to 65.9 last month from 62.7 in June. Economists in a Bloomberg survey projected a reading of 61.5.

Fed officials led by Fed Chairman Ben Bernanke concluded a two-day meeting on Wednesday saying they “will provide additional accommodation as needed” to bolster the expansion. The Federal Open Market Committee also said it would “closely monitor” economic data and financial developments.

National benchmark indexes rose in 16 of the 18 western European markets. France’s CAC 40 Index gained 2.9 percent, the UK’s FTSE 100 Index advanced 2.8 percent, while Germany’s DAX Index jumped 2.6 percent.

Bankia, which became Spain’s third-largest lender when seven regional banks were combined, surged 33 percent, leading gains in shares of European lenders.

Vestas jumped 11 percent. The world’s biggest wind-turbine maker allayed investor concern that it might breach its loan covenants, leading to a default scenario. The company said its banks agreed to let it draw on credit lines and defer a test of the covenants.

Air France rallied 11 percent. The company’s operating loss narrowed to 66 million euros (US$82 million) from 145 million euros a year earlier, helped by the introduction of a 2 billion euro savings plan, Air France said on Monday. That beat the 163 million-euro average estimate of analysts in a Bloomberg poll.

Nokia advanced 12 percent. The stock on Wednesday completed its biggest seven-day increase in two decades. Nokia chief executive officer Stephen Elop and several directors bought more than US$1 million of the shares the previous week, the company said on Tuesday. Nokia’s surge was also helped by increasing sales of its Lumia smartphone series and speculation of a bid from Lenovo Group Ltd.

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