European stocks climbed for a fifth straight week, the longest stretch of gains since October 2007, as speculation grew the worst of the credit crisis is over and government measures will succeed in reviving the global economy.
HSBC Holdings PLC, UniCredit SpA and Natixis SA rallied more than 9 percent after Wells Fargo & Co reported a record first-quarter profit that beat the most optimistic Wall Street estimates. Daimler AG, the world’s second-largest maker of luxury cars, rose 3.6 percent after saying it anticipates a profit improvement and the German government agreed to more than triple payments to buyers of new low-emission vehicles.
The Dow Jones STOXX 600 Index added 1 percent to 188.06. The index has rebounded 19 percent since reaching a 12-year low on March 9 as banks from Barclays PLC to Citigroup Inc signaled they had a positive start to the year and Treasury Secretary Timothy Geithner unveiled plans to finance the purchase of as much as US$1 trillion in lenders’ toxic assets.
National indexes rose in 14 of the 18 western European markets in the holiday-shortened trading week. Germany’s DAX Index climbed 2.4 percent. France’s CAC 40 added 0.5 percent, while the UK’s FTSE 100 slipped 1.1 percent.
The Bank of England left its benchmark interest rate unchanged at a record low of 0.5 percent and said it would keep buying government bonds to fight the deepest recession in a generation.
Analysts expect profits for companies in the STOXX 600 to climb 22 percent on average this year with financial firms leading the growth, estimates compiled by Bloomberg show.
Goldman Sachs Group Inc said in a report dated Wednesday that investors should favor manufacturing, technology and other industries that rely on economic growth as the recession eases.