Sun, Jun 30, 2013 - Page 15 News List

European markets report first weekly rise in over a month


European stocks posted their first weekly advance since May 17, as China took steps to ease a cash crunch and US data boosted optimism the global economy can withstand a paring of central bank stimulus.

Mediaset SpA jumped 15 percent as Credit Suisse Group AG raised its price target for the shares. Debenhams PLC rallied the most since 2011 after saying it maintained sales even as cold weather reduced spending on summer clothing. Afren PLC rose 8 percent after saying oil found off the coast of Nigeria may exceed its estimates.

The benchmark STOXX Europe 600 Index rose 1.7 percent to 285.02 this week, snapping five weeks of losses. The gauge still posted its first monthly drop since May last year and closed the quarter with a 3 percent decline. It has retreated 8.2 percent since May 22 after US Federal Reserve Chairman Ben Bernanke said the central bank could reduce quantitative easing if the US economy improves sustainably.

“Assuming we see positive economic data for the next few months, then what you should see is a market that can hand off from life support towards some underlying growth,” Alex Friedman, chief investment officer at UBS AG’s wealth-management unit, said on Bloomberg TV this week. “China said essentially that it wants to make sure it doesn’t have a bubble on the credit side, and they clamped down a little bit. That’s a good thing.”

The VSTOXX Index, which measures the cost of using options to hedge against swings in the Euro STOXX 50 Index, fell 9.3 percent this week, halting five consecutive weeks of gains.

China’s money-market rates eased after the People’s Bank of China said it provided funding to some financial institutions to stabilize interbank lending rates and would use short-term liquidity operations and existing loan-facility tools to steady the market. The rates had surged in the week through June 21.

In the US, Atlanta Fed president Dennis Lockhart said investors may have overreacted to Bernanke’s comments on a potential reduction in stimulus. Fed Bank of New York president William Dudley said any decision to slow the pace of asset purchases would not represent a withdrawal of stimulus.

The National benchmark indexes rose in 11 of the 18 western European markets this week. The UK’s FTSE 100 gained 1.6 percent, France’s CAC 40 climbed 2.2 percent and Germany’s DAX Index advanced 2.2 percent.

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