Sun, Nov 17, 2013 - Page 15 News List

European stocks extend their gains for a sixth week

WINNING STREAK:The STOXX Europe 600 edged up 0.1% as central banks around the world vowed to continue their support for economic growth

Bloomberg

European stocks advanced for a sixth week, posting their longest winning streak since August last year, as signs emerged the US Federal Reserve would not rush to reduce the pace of its stimulus, outweighing data that showed the euro-area economic recovery was faltering.

TalkTalk Telecom Group PLC rallied 12 percent after raising its revenue-growth target. Swiss Life Holding AG jumped to a five-year high after naming a new CEO. Bouygues SA rose 5 percent after reporting better-than-estimated earnings. Serco Group PLC posted the biggest drop in more than 22 years after forecasting a profit decline next year.

The STOXX Europe 600 Index climbed 0.1 percent to 323 this week. The 600-share regional benchmark has surged 15 percent this year, reaching its highest level since May 2008, as central banks around the world pledged to continue their support for economic growth. The Euro STOXX 50 Index, a measure for euro-area shares, gained 0.7 percent this week.

In the US, equities extended records as US Federal Reserve Vice Chair Janet Yellen, nominated to succeed Ben Bernanke as Fed chairman, said she would ensure the US$85 billion in monthly bond purchases are not scaled back too soon. The recovery in the world’s largest economy remains fragile, she said at her senate confirmation hearing.

“Yellen is not going to taper until the very earliest March, and maybe later,” said James Butterfill, head of global equity strategy at Coutts & Co in London. “That is positive for income stocks and generally stocks. Our view is that there is probably not huge upside coming into the year-end but over the longer run, equities are not overvalued, more like fairly valued.”

Data showed that France’s economy unexpectedly shrank in the third quarter, while German GDP slowed and Italy extended its recession.

That led to a slowdown in euro-area growth, where GDP expanded 0.1 percent in the three months through September, compared with 0.3 percent growth in the second quarter, according to a report from the EU’s statistic office in Luxembourg.

National benchmark indices rose in 11 of the 18 Western European markets. Germany’s DAX gained 1 percent. The UK’s FTSE 100 fell 0.2 percent. France’s CAC 40 added 0.8 percent.

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