European stocks had the biggest weekly gain in a month, led by banks and raw-material producers, as concern eased that losses in the financial industry will worsen and higher metals prices lifted mining shares.
Barclays PLC added 10 percent and Credit Suisse Group AG rose 7 percent as the US government provided funding to Fannie Mae and Freddie Mac, the biggest US mortgage-finance companies.
BHP Billiton Ltd, the world’s largest mining company, climbed 4.9 percent as copper rebounded. ITV PLC rallied 21 percent as Mediaset SpA reiterated interest in the UK’s biggest commercial broadcaster.
Europe’s Dow Jones STOXX 600 Index added 3 percent to 280.41, trimming this year’s decline to 23 percent. Almost US$16 trillion has been erased from global equities this year as the first nationwide decline in US home prices since the Great Depression sparked more than US$510 billion in credit-related losses worldwide and threatened economic growth.
“People will start to see some light at the end of the tunnel now” for financial companies, said William De Vijlder, chief investment officer at Fortis Investments, which has the equivalent of US$309 in assets under management.
“We still believe we are in a commodities bull market,” he said in a Bloomberg Television interview.
National benchmark indexes advanced in 14 of the 18 western European markets this week. France’s CAC 40 gained 3.2 percent, and Germany’s DAX added 1.8 percent. The UK’s FTSE 100 Index increased 3.4 percent this week. A computer fault on Monday left some traders without prices and unable to buy or sell shares in London for more than six hours.
Barclays, the UK’s third-largest bank, climbed 10 percent. Credit Suisse Group AG, Switzerland’s second-biggest bank, increased 7 percent.
US Treasury Secretary Henry Paulson said last Sunday the US government would provide short-term funding to Fannie and Freddie and purchase debt backed by home loans. Paulson and Federal Housing Finance Agency Director James Lockhart placed the companies in a government-operated conservatorship.
Investors speculated on Friday that Lehman Brothers Holdings Inc. will be bought after the stock erased more than 70 percent of its value this week on a larger-than-estimated loss for the third quarter.
Rising metal prices helped send a measure of raw-material producers to the steepest gain among 18 industry groups in the STOXX 600, adding 5.4 percent. Copper rallied 3.4 percent in London this week, snapping a two-week decline. Nickel and tin also advanced.
BHP increased 4.9 percent. Anglo American PLC, the world’s fourth-biggest diversified mining company, rallied 8.6 percent.
ITV soared 21 percent, leading gains among media stocks in the STOXX 600 and posting the steepest advance among all shares in the measure.
Ciba Holding AG, the world’s largest maker of colors for plastics, surged 18 on speculation that the company may be a takeover target for bigger chemical companies. Ciba spokesman Tobias Woelfing said the company doesn’t comment on market “rumors.”
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