European stocks posted a second week of gains as Chinese economic reports beat forecasts and as the US delayed a decision on military action against Syria.
Kabel Deutschland AG rose 7.1 percent after its shareholders approved a bid by Vodafone Group PLC, while Nokia Oyj surged 15 percent, gaining every day of the week, after brokerages including Bank of America Corp and Berenberg Bank upgraded the shares. Randgold Resources Ltd and Fresnillo PLC each dropped at least 5 percent as gold and silver prices fell.
The STOXX Europe 600 Index advanced 1.8 percent to 311.46 this week, reaching a five-year high on a daily closing basis. It has climbed 11 percent so far this year as the eurozone emerged from recession and as central banks pledged to maintain stimulus to support the global economy.
The Standard & Poor’s 500 Index has rallied 18 percent so far this year. The STOXX 600, while lagging behind US equities in year-to-date returns, has beaten the S&P 500 this quarter. The European gauge has rallied 9.3 percent since the end of June, compared with a 5.1 percent increase in the US benchmark.
National benchmark indices climbed in 16 of the 18 western European markets. Germany’s DAX added 2.8 percent, the UK’s FTSE 100 gained 0.6 percent, and France’s CAC 40 rose 1.6 percent.
“European stocks have underperformed US equities so far this year, and with the eurozone out of recession, we’re now in a catch-up phase,” said Espen Furnes, a fund manager at Storebrand Asset Management in Oslo. “The upward move over the last two weeks is warranted and has a solid fundamental basis. For the time being, the Syria situation seems to be under control and financial markets are responding positively to a dampened conflict level.”
A gauge of technology companies climbed 3.6 percent for the second-best performance on the STOXX 600. Alcatel-Lucent climbed 8.9 percent and Ericsson AB gained 3 percent.
The positive data from China came on Tuesday, when the Chinese National Bureau of Statistics said industrial output rose 10.4 percent last month from a year earlier, exceeding the 9.9 percent median estimate of economists surveyed by Bloomberg.
Another release the same day showed retail sales in the world’s second-biggest economy gained 13.4 percent, compared with a projection for a 13.3 percent increase.