European stocks rebounded from a one-month low in the past week as better-than-expected earnings at companies from Swiss Reinsurance Co to Delhaize Group SA fed investors’ expectations that a seven-month rally will go on.
Swiss Re, the world’s second-largest reinsurer, and Delhaize, the owner of Food Lion supermarkets, both gained more than 7 percent. BNP Paribas also rose after beating analysts’ estimates, while Royal Bank of Scotland Group PLC tumbled 12 percent after it ceded greater control to the government.
The Dow Jones STOXX 600 Index rose 1.7 percent to 241.06 this week, climbing from the lowest level since Oct. 5 at the end of last week and posting its first gain in three weeks. The Euro STOXX 50, a measure for the largest companies in the euro zone, climbed 1.9 percent.
A global rally in equities lost pace last month on concern the rebound has gone too far relative to the prospects for economic growth. The STOXX 600 is still up 53 percent since March 9 even after dropping 2.3 percent last month.
“For the management teams that have a good track record of managing their businesses tightly and with a strong business franchise, it will be an environment in which decent earnings and cash flow growth will be seen,” said Mark Lovett, chief investment officer for European equities at RCM Ltd in London. “Under these conditions equities can deliver good capital returns.”
National benchmark indexes advanced in all major western European markets this week except Sweden. The UK’s FTSE 100 rose 2 percent and France’s CAC 40 surged 2.8 percent. Germany’s DAX added 1.4 percent as Adidas AG increased.
Indexes fluctuated in the week’s last session as unemployment in the US soared to a 26-year high of 10.2 percent last month and employers cut more jobs than forecast.
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