European equities posted a weekly gain, rising to a 23-month high, as German investor confidence climbed to the highest in two-and-a-half years and US lawmakers voted to temporarily suspend the government’s borrowing limit.
The STOXX Europe 600 Index added 0.9 percent to 289.72 this week, snapping two weeks of losses to close at the highest level since Feb. 18, 2011. The gauge has advanced 3.6 percent this year as US lawmakers agreed on a budget deal averting spending cuts and tax increased that had threatened to push the world’s biggest economy into a recession.
“Some of the dark clouds over the market are starting to dissipate,” Henk Potts, as an equity strategist at Barclays PLC in London, said in a phone interview this week. “It has reassured a lot of investors, which means we are able to start looking again at the cheap valuations and bright corporate picture.”
About 60 percent of western European companies to have reported results since Jan. 8 exceeded analysts’ earnings estimates. Profits at companies in the STOXX 600 are forecast to grow 9.2 percent this year, projections compiled by Bloomberg show.
In Germany, the ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations climbed to 31.5 this month from 6.9 last month, signifying improved confidence.
A measure of euro-area services and manufacturing output also contracted at a slower pace this month than economists had estimated. A composite index based on a survey of purchasing managers in both industries rose to 48.2 this month from 47.2 last month, Markit Economics said. A reading below 50 indicates that activity shrank.
The European Central Bank said financial firms would repay more of their emergency three-year loans than forecast in another sign the region’s debt crisis was abating.
A total of 278 financial institutions will return 137.2 billion euros (US$185 billion) on Wednesday, the first opportunity for early repayment of the initial three-year loan, compared with the median projection of 84 billion euros in a Bloomberg survey of economists.
National benchmark indexes rose in 16 of the 18 western European markets this week. France’s CAC 40 added 1 percent and Germany’s DAX gained 2 percent. The UK’s FTSE 100 Index advanced 2.1 percent even as Britain’s economy shrank a higher-than-expected 0.3 percent in the fourth quarter.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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