European markets post largest weekly gain in four months

Bloomberg

Sun, Jun 10, 2012 - Page 10

European stocks posted their biggest weekly advance in four months as China cut interest rates and the European Central Bank said it’s ready to add more stimulus if the economy worsens.

The STOXX Europe 600 Index advanced 2.9 percent to 241.93 this week, the biggest jump since Feb. 3. The benchmark measure has still tumbled 11 percent from this year’s high on March 16 on concern Greece may be forced to leave the eurozone.

“The bottom line for this week’s rebound was a technical recovery, backed by high hopes of stimulus in the US and in Europe,” said Trung-Tin Nguyen, a Zurich-based hedge-fund manager at TTN AG. “The recovery could still continue for a little while, but there’s still a lot of noise disturbing the markets, with the Greek elections coming up and Spain’s problems still looming.”

National benchmark indices climbed in 14 of the 18 Western European markets this week. The UK’s FTSE 100 gained 3.3 percent. France’s CAC 40 rose 3.4 percent and Germany’s DAX added 1.3 percent. Spain’s IBEX 35 rallied 8 percent.

A report on Wednesday showed the eurozone economy stalled in the first quarter as companies cut spending to weather the debt crisis, offsetting a gain in exports. GDP in the region was unchanged from the fourth quarter, when it declined 0.3 percent.

In Germany, Europe’s largest economy, a report showed exports declined 1.7 percent in April, for the first time this year.