Sun, Dec 01, 2013 - Page 15 News List

European stocks up for a third month on rising confidence

Bloomberg

European stocks posted their biggest weekly gain since October, completing a third consecutive monthly increase, after reports on consumer confidence and the unemployment pointed to a strengthening economy in the region.

BTG PLC surged the most since 2008 this week as US regulators approved the sale of its varicose-vein treatment. Algeta ASA rallied the most in four years after Bayer AG made a preliminary offer for the drugmaker. Thomas Cook Group PLC rose 17 percent after the travel operator said profit increased.

The STOXX Europe 600 Index rose 0.7 percent to 325.16 this week, its largest increase since Oct. 18. The regional benchmark gauge has surged 16 percent this year, as central banks pledged to continue their support for economic growth. The Euro STOXX 50 Index, a measure for the euro area, gained 1 percent this week.

“The economy in Europe is recovering,” said Tobias Britsch at Meriten Investment Management GmbH. “I’m cautiously optimistic as we go into next year. If we see economic growth going into companies’ bottom line, that will mean stocks won’t be all that expensive, and clearly supports the case for equities.”

The STOXX 600 is trading at 15.2 times projected earnings, up from 11.8 times at the beginning of this year and more than the five-year average of 12. It remains below a peak of 15.7 times estimated profit in 2009, according to data compiled by Bloomberg. The gauge has climbed every December since 2009.

Data from Germany this week showed consumer confidence will climb to 7.4 this month from a revised 7.1 last month, according to Nuremberg-based research company GfK AG.

Other reports showed Italian business confidence rose more than economists projected, while unemployment in the 17-nation euro area slipped in October from a record high.

German Chancellor Angela Merkel reached a coalition agreement with the Social Democrats this week, putting her on track for a third term to lead Europe’s biggest economy. The pact signaled the coalition will oppose joint liability for euro-area nations’ debt.

National benchmark indices rose in every western European market this week, except the UK and Finland. Germany’s DAX gained 2 percent and France’s CAC 40 added 0.4 percent, while the UK’s FTSE 100 slid 0.4 percent for its fourth consecutive weekly retreat.

This story has been viewed 1878 times.
TOP top