European stocks posted their first back-to-back weekly gains since May as better-than-estimated earnings and lower oil prices fueled a rally in carmakers and banks climbed on speculation that credit-market losses will abate.
Volkswagen AG, Fiat SPA and PSA Peugeot Citroen advanced after the automakers reported profit that exceeded projections and crude fell for a third consecutive week. Credit Suisse Group AG, the second-biggest Swiss bank, rallied the most since March 2003 on earnings that were almost double what analysts expected.
Europe’s Dow Jones STOXX 600 Index increased 0.4 percent this week to 281.76, extending its rebound from a three-year low on July 15 to 5.7 percent. The measure has tumbled 23 percent this year after US$467 billion of credit losses and asset writedowns at banks prolonged the global economy’s slump and inflation eroded profits.
The STOXX 600’s rally from its low this month was led by bank and consumer shares as earnings from Credit Suisse to Citigroup Inc topped estimates and oil tumbled more than 15 percent from its all-time high on July 11. Second-quarter profits at financial firms in the STOXX 600 that reported results so far exceeded analysts’ projections by 15 percent, while consumer-goods makers beat expectations by 7.8 percent, Bloomberg data show.
National benchmark indexes gained in six of the 18 western European markets. The Swiss Market Index added 2.8 percent, and France’s CAC 40 increased 1.8 percent. The UK’s FTSE 100 slipped 0.4 percent, while Germany’s DAX climbed 0.9 percent.
The STOXX 50 rose 0.7 percent and the Euro STOXX 50, a measure for the euro region, advanced 0.9 percent.