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Sun, Aug 09, 2009 - Page 10 News List

Europe posts fourth weekly gain, HSBC leads banks higher

BLOOMBERG

European stocks rose for a fourth week after the unemployment rate in the US economy unexpectedly fell last month and HSBC Holdings PLC posted a surprise profit.

British Land Co climbed 11 percent, pacing gains among real estate companies, as the pace of US job losses slowed more than forecast last month and the unemployment rate dropped for the first time since April last year. HSBC and Barclays PLC both jumped more than 9 percent after income from their investment banking units doubled in the first half.

Europe’s Dow Jones STOXX 600 Index added 2.6 percent to 230.68, its fourth straight weekly gain. The gauge has climbed 46 percent since March 9 as companies from GlaxoSmithKline PLC to Goldman Sachs Group Inc reported better-than-estimated earnings. The regional measure is now valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.

“Investors are continuing to buy into the market having missed some of the rally since the March lows,” said Richard Hunter, London-based head of UK equities at Hargreaves Lansdown Stockbrokers. “Markets are now searching for the next positive catalyst to move things along.”

ING Groep NV equity strategists raised financial-services shares and basic resources, chemical and industrial stocks to “overweight,” as the brokerage shunned industries whose profits are less tied to economic growth.

Real estate shares posted the steepest gains among all 19 industry groups on the pan-European STOXX 600 index this week, adding 8.8 percent.

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