European stocks rose for the third straight week, reaching their highest level in more than six years, as companies from Meda AB to Valeo SA reported earnings that exceeded analysts’ estimates.
Meda had the biggest weekly gain since December 2008 after reporting fourth-quarter net income and revenue that exceeded projections. Valeo gained 11 percent after France’s second-biggest auto-parts maker posted second-half earnings that topped estimates. Vodafone Group PLC rallied 8.3 percent as it completed the disposal of its stake in Verizon Wireless, the biggest sale of the past decade.
The STOXX Europe 600 Index rose 0.8 percent to 336.09 this week, completing its longest streak of weekly gains since Nov. 15. The gauge closed at the highest level since Jan. 14, 2008.
“The earnings season is in full swing,” said Christoph Riniker, head of strategy research at Julius Baer Group in Zurich. “We expect earnings to grow in Europe, where we have seen lower figures for the last three years. The reason for this is an improving macroeconomic environment.”
The STOXX 600 has gained 4.2 percent this month as the Bank of England (BOE) said Britain is not ready for an increase in interest rates and comments by US Federal Reserve Chair Janet Yellen fueled optimism the US economy can withstand reduced stimulus.
The gauge slid 1.8 percent last month, as investors weighed cuts to the Fed’s bond-buying program, China’s economic slowdown and volatility in emerging markets.
The Fed released the minutes of its Jan. 28-29 meeting this week. At the meeting, the last under former chairman Ben Bernanke, policymakers reduced the bank’s monthly asset purchases to US$65 billion, citing the improved outlook for the labor market.
“Tapering has less influence,” Riniker said. “With the US economy being well on track and investors having been guided towards tapering for some time now, it was not the question anymore of ‘if,’ but ‘when’ and ‘how much’ tapering will happen.”
National benchmark indices climbed in 14 of the 18 Western European markets. The UK’s FTSE 100 added 2.6 percent, while France’s CAC 40 climbed 0.9 percent. Germany’s DAX fell 0.1 percent.