Sun, Nov 10, 2013 - Page 15 News List

European stocks post longest winning streak of year on ECB rate cut, US data


Stocks in Europe posted a fifth week of gains, the longest winning streak this year, as the European Central Bank (ECB) unexpectedly lowered its key interest rate, and US economic growth and jobs data beat forecasts.

Commerzbank AG posted the largest advance in three months after reporting thast third-quarter net income climbed to 77 million euros (US$103 million), beating the 32 million euro estimate of analysts surveyed by Bloomberg.

ArcelorMittal surged the most in almost two years as earnings increased at the world’s biggest steelmaker.

Among the losers this week were Ryanair Holdings PLC, which slid 5.6 percent after the budget airline forecast its first annual income decline in five years, and Finmeccanica SpA, which dropped 4.8 percent after cutting its full-year outlook.

The STOXX Europe 600 Index added 0.4 percent to 322.72 this week. The benchmark measure, which climbed to its highest level since May 2008 on Wednesday, has risen 15 percent this year, on course for the biggest annual advance since 2009 as central banks around the world took steps to support the economic recovery.

“The ECB rate cut is good news, not only because of easier money but also because it should push the euro lower,” said Pierre Mouton, who helps oversee US$6 billion as a portfolio manager at Notz, Stucki & Cie in Geneva, Switzerland.

“I’m very happy with the performance of European equities so far this year and we still prefer it for valuation reasons,” he added.

National benchmark indices advanced in 12 of the 18 western European markets this week. Germany’s DAX added 0.8 percent, the Swiss Market Index rose 0.2 percent, the UK’s FTSE 100 slid 0.4 percent and France’s CAC 40 dropped 0.3 percent.

The ECB on Thursday trimmed its benchmark interest rate to 0.25 percent from 0.5 percent. The reduction was forecast by just three of 70 economists in a Bloomberg News survey, with the rest predicting no change.

The central bank expects interest rates to remain at the current level or lower for an extended period of time, ECB President Mario Draghi said at a press conference after the announcement.

The Bank of England maintained its key interest rate at 0.5 percent and kept its asset-purchase target at £375 billion (US$603 billion), matching the median forecast of economists surveyed by Bloomberg.

This story has been viewed 1885 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top