European stocks rose for a fourth week, the longest stretch of gains in two months, boosted by Chinese economic data and assurances from the US Federal Reserve that its stimulus program remains flexible.
BHP Billiton Ltd and Rio Tinto Group climbed more than 3.5 percent after the world’s largest mining companies each reported an increase in iron ore output. Carrefour SA surged 8.1 percent as sales in the French retailer’s home market stabilized. Banco Popolare SC and Royal Bank of Scotland Group PLC led a rally in financial shares.
The STOXX Europe 600 Index advanced 1.2 percent to 299.85 this week, the highest level since May.
The STOXX 600 has still declined 3.5 percent from a near five-year high on May 22 amid speculation the Fed will begin tapering bond purchases as soon as September. The benchmark measure has climbed 7.2 percent this year.
Fed Chairman Ben Bernanke, giving evidence to the US House of Representatives’ Financial Services Committee on Wednesday, said the US central bank’s quantitative easing (QE) program is “by no means on a preset course” and bond purchases could be reduced more quickly or expanded as economic conditions warrant.
“The markets put a dovish spin on Bernanke’s testimony to Congress,” KCG Europe Ltd strategist Ioan Smith said. “In the end he didn’t say anything new, but the lack of any definitive signals on the timing of QE tapering gave stocks a boost.”
Minutes from the Bank of England’s July 3 to July 4 meeting released this week showed officials voted unanimously to maintain the central bank’s ￡375 billion (US$572 billion) stimulus program.
European equities climbed on Monday as a report showed China’s GDP expanded 7.5 percent in the second quarter from a year earlier. That matched the median economist forecast in a Bloomberg survey and Beijing’s target rate for this year.
National benchmark indices climbed in 13 of the 18 western European markets this week. The UK’s FTSE 100 gained 1.3 percent, France’s CAC 40 climbed 1.8 percent and Germany’s DAX jumped 1.5 percent.
A gauge of basic-resources companies advanced 4.3 percent for the best performance among 19 industry groups in the STOXX 600. Rio Tinto climbed 4.2 percent after posting a 7 percent increase in second-quarter iron ore production and raising its forecast for full-year copper output.
BHP rose 3.9 percent as the world’s largest miner reported a 17 percent increase in fourth-quarter iron-ore production, beating the median analyst estimates in a Bloomberg survey.
Carrefour jumped 8.1 percent in Paris after France’s biggest retailer said sales at stores open at least a year were unchanged as stronger demand in Latin America helped cushion a drop in Europe in the second quarter. A decline of 1.1 percent in domestic revenue beat the consensus estimate of a 1.8 percent slide, according to Citigroup Inc.
A gauge of banks rose 3.3 percent as the European Central Bank altered its collateral rules for refinancing banks and said it’s looking at ways to boost lending to small and medium-sized companies by changing the eligibility of asset-backed securities.
Banco Popolare rose 12 percent in Milan, RBS rallied 11 percent in London amd Commerzbank AG, Germany’s second-largest lender, surged 9.2 percent for the biggest gain in 10 months.