Sun, May 19, 2013 - Page 15 News List

European markets post fourth weekly gain on earnings

Bloomberg

European stocks rose for a fourth week as earnings from Cie. Financiere Richemont SA to ICAP PLC beat analyst estimates and the Bank of England (BOE) lifted its growth forecast for Europe’s third-biggest economy.

Richemont gained 13 percent as it also proposed a dividend that surpassed projections. Renault SA led shares of automobile companies higher as the region’s car sales increased for the first time in 19 months. Suedzucker AG plunged 16 percent after saying full-year operating profit will decline.

The STOXX Europe 600 Index advanced 1.2 percent to 308.72 this week, completing its longest streak of weekly gains since March 15. The measure has rallied 10 percent so far this year, its best start to a year since 1998, bolstered by central-bank monetary stimulus and better-than-estimated US economic data.

“Companies have cut costs and have been able to produce better-than-expected earnings,” said Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg. “There is a new appetite for cyclical sectors with the idea that the economy may improve.”

BOE Governor Mervyn King on Wednesday said that an economic recovery in the UK was now “in sight.” In the central bank’s quarterly inflation report, King’s last before his retirement in July, officials predicted that growth would accelerate to 0.5 percent in the second quarter from 0.3 percent in the first three months of the year.

Stocks erased intraday losses on Tuesday after billionaire David Tepper, who runs hedge-fund firm Appaloosa Management LP, said in an interview on CNBC that he was “definitely bullish” about markets.

US data on Friday showed that consumer confidence this month rose to the highest level in almost six years and leading economic indicators last month climbed by more than estimated.

Still, German investor confidence this month rose less than forecast, an earlier report showed. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to 36.4 from 36.3 last month. Economists in a Bloomberg News survey had forecast a gain to 40.

National benchmark indexes rallied in all of western Europe’s 18 markets, except Portugal and Iceland. France’s CAC 40 added 1.2 percent, the UK’s FTSE 100 Index increased 1.5 percent, while Germany’s DAX climbed 1.4 percent.

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