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Sun, Feb 08, 2009 - Page 10 News List

European stocks keep on rising to erase year’s loss

BLOOMBERG

European stocks gained for a second week, erasing this year’s loss, as companies from Vodafone Group PLC to Electrolux AB reported ­better-than-estimated results and governments stepped up measures to revive the global economy.

Vodafone, the largest mobile-phone company, rose 6.7 percent this week after sales beat analysts’ projections. Electrolux, the second-biggest appliance maker, climbed 16 percent on a smaller-than-expected loss. Infineon Technologies AG increased 17 percent as Europe’s second-largest maker of semiconductors said it would deepen cost cuts and lower ­investments to ­preserve cash. Xstrata PLC led mining shares higher as metals prices rallied.

The Dow Jones STOXX 600 Index added 3.8 percent to 198.53, for a 0.1 percent gain this year.

The measure has climbed 8.8 percent in the past two weeks amid speculation companies will weather the crisis that drove the US, Europe and Japan into simultaneous recessions and government measures and interest-rate cuts will revive the economy.

“Earnings from companies that depend on the economy have done better and that is reassuring,” said Bruno Ducros, a fund manager at Cardif Asset Management in Paris, which oversees about US$2.6 billion in stocks.

“It’s motivating the market. There are stimulus plans all over the world and that’s a very positive element,” he said.

National benchmark indexes increased in 15 of the 18 western European markets. Germany’s DAX Index rose 7.1 percent, while France’s CAC 40 advanced 5 percent. The UK’s FTSE 100 added 3.4 percent as Aviva PLC and BHP Billiton Ltd rallied.

Profits for companies in the index are expected to decline 1.6 percent this year following a 20 percent slump last year, according to data compiled by Bloomberg.

Governments around the world are fighting to revive a global economy burdened by more than US$1 trillion of losses and writedowns tied to the credit crisis.

China’s government started investing the second allocation of a 4 trillion-yuan (US$585 billion) economic stimulus package, the offical Xinhua news agency reported. Japan’s central bank said it will buy ¥1 trillion (US$10.9 billion) of shares held by financial institutions, while Australia announced A$42 billion (US$28 billion) in extra spending.

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