European stocks climbed this week as companies from Anheuser-Busch InBev NV to Bayer AG posted quarterly earnings that beat estimates and as the European Central Bank (ECB) said interest rates will remain low.
AB InBev, the world’s biggest brewer, jumped 11 percent, leading food-and-beverage stocks higher. Bayer paced gains among chemical makers as it surged 7 percent. Alcatel-Lucent SA soared 17 percent after quarterly profit exceeded projections and K+S AG posted its biggest weekly drop in more than 14 years as OAO Uralkali forecast that potash prices will plummet.
The STOXX Europe 600 Index advanced 1.8 percent to 304.15 this week. The equity benchmark rose every day this week, its longest winning streak since April. That pushed its valuation to 13.8 times estimated earnings, the highest since December 2009. More than 140 STOXX 600-listed companies reported earnings this week, according to data compiled by Bloomberg.
National benchmark indices rose in all 18 western European markets this week. The UK’s FTSE 100 advanced 1.4 percent, while France’s CAC 40 climbed 1.9 percent and Germany’s DAX Index added 2 percent.
“Investors have a far more positive outlook on European equities now than before as they are hoping the economy will oblige and show an improvement next year,” Hermes Sourcecap Ltd chief executive Andrew Parry said in a telephone interview. “Expectations for profit have already fallen so much that if a company is posting slightly better earnings on depressed estimates, that’s a welcome relief.”
Analysts have lowered their profit forecasts for companies listed on the STOXX 600 since the beginning of this year. Estimates have fallen 8.3 percent to 22.09 euros per share, according to data compiled by Bloomberg.
ECB President Mario Draghi on Thursday said interest rates in the eurozone will remain low for an extended period of time.
He also said there are indications that the combined economy of the currency bloc is stabilizing. The ECB and the Bank of England left their benchmark interest rates unchanged at 0.5 percent, as forecast in Bloomberg surveys.