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Sun, May 18, 2008 - Page 10 News List

EUROPE: European stocks climb on earnings, merger speculation

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European stocks rose this week as companies including BNP Paribas SA and European Aeronautic, Defence & Space Co (EADS) reported earnings that beat analysts’ estimates and investors speculated mergers and acquisitions are picking up.

BNP Paribas had its biggest weekly gain in a month as profit at France’s largest bank declined less than projected. EADS rallied after posting record production rates at its Airbus SAS unit. BT Group Plc also climbed on earnings. BHP Billiton Ltd led an advance in basic-resources shares on speculation China may buy a stake in the world’s largest mining company.

Europe’s Dow Jones STOXX 600 Index added 1.5 percent to 329.86, the highest since Feb. 26 and trimming the decline this year to 9.5 percent. Concern that record oil prices, inflation and US$342 billion in credit losses will cut economic and profit growth has weighed on stocks.

“The earnings reports this week were important and one of the driving forces, as were commodities,” said Carsten Klude, head of investment strategy at M.M. Warburg & Co in Hamburg, adding that acquisitions were also buoying the market. “This topic seemed dead for some time but is now back on the agenda.”

Germany’s DAX Index added 2.2 percent. France’s CAC 40 gained 2.4 percent. The UK’s FTSE 100 advanced 1.6 percent. The STOXX 50 also rallied 1.6 percent, as did the Euro STOXX 50, a measure for the euro region.

European economic growth accelerated more in the first quarter than economists estimated. Gross domestic product in the 15 euro countries increased 0.7 percent from the fourth quarter, the European Union’s statistics office said on Thursday. Germany’s 1.5 percent expansion was more than double what economists estimated.

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