Sun, Apr 20, 2014 - Page 15 News List

European equities rally as US data outweigh Ukraine

CONFIDENCE:National benchmark indices in 11 of the 18 west European markets climbed, as the US said retail sales and industrial production rose

Bloomberg

European stocks posted a weekly gain as better-than-estimated US data bolstered investor confidence the economic recovery is on course, outweighing an escalation in the crisis in eastern Ukraine.

UniCredit SpA rose 4 percent and Banco Popolare SC advanced 6.6 percent after Berenberg Bank said Italian lenders would benefit the most if the rebound in the European economy continues. Tesco PLC added 3.1 percent after reporting trading profit that beat estimates. Afren PLC helped a gauge of oil-and-gas companies post the best performance among industry groups. ASML Holding NV tumbled 7 percent after forecasting second-quarter sales that trailed analysts’ projections.

The Europe STOXX 600 Index added 1.1 percent to 332.43 in the holiday-shortened week. The benchmark gauge has climbed in four of the past five weeks and increased 1.3 percent this year.

“US data is fine,” James Buckley, a portfolio manager at Baring Asset Management Ltd in London, said by telephone. “Housing is a bit soft, but all the other indicators are tracking quite well. The improvement looks well established, and that will help US equity markets and spill over into European markets.”

National benchmark indices rose in 11 of the 18 markets in western Europe. The UK’s FTSE 100 and Germany’s DAX advanced 1 percent each, while France’s CAC 40 gained 1.5 percent. Markets were closed on Friday and will remain close tomorrow.

US reports this week showed retail sales and industrial production in the world’s largest economy jumped last month, topping estimates. Fewer Americans than forecast filed first-time applications for jobless benefits, while house construction rose less than projected, separate data showed.

The violence in eastern Ukraine escalated this week and the acting government in Kiev accused Russia of deploying troops in its territory. The US and the EU threatened to extend sanctions on Russia after US President Barack Obama and Russian President Vladimir Putin failed to reach a breakthrough in a phone call. All the four sides met in Geneva on Thursday and issued a statement calling for an array of actions, including the disarming of militant groups and the freeing of public buildings taken over by insurgents.

Additional reporting by AFP

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