European stocks rose for a second week after the Group of 20 nations agreed to maintain stimulus efforts and earnings at companies from Credit Agricole SA to Holcim Ltd beat analysts’ estimates.
BHP Billiton Ltd and Rio Tinto Group led mining shares higher as China’s industrial production and orders for Japanese machinery increased. Credit Agricole, France’s third-largest bank by market value, and Holcim Ltd, the world’s second-biggest cement maker, gained more than 7 percent. British Airways PLC and Iberia Lineas Aereas de Espana SA advanced at least 7 percent after agreeing to a US$7 billion merger.
The Dow Jones STOXX 600 Index rose 2.8 percent to 247.8 this week. The Euro STOXX 50, a measure for the largest companies in the euro zone, climbed 3.2 percent.
“The earnings season has beaten expectations on both profit as well as on the sales side,” said Gregor Mast, an equity strategist at Clariden Leu AG in Zurich, which oversees about US$88 billion. “The market is now digesting the news and waiting for confirmation that economic recovery will continue and profits will increase. We can’t exclude that markets may reach new highs at the end of the year.”
The STOXX 600 has surged 57 percent since March 9 amid signs government stimulus programs and record-low interest rates are helping to drag the economy out of recession.
UK Chancellor of the Exchequer Alistair Darling, hosting a meeting of finance ministers from the G20 nations, said his colleagues decided to keep interest rates low and maintain record budget deficits until a recovery takes hold.
The euro-area economy emerged from its worst recession since World War II in the third quarter as exports from Germany and France helped compensate for households’ reluctance to increase spending. GDP for the 16 nations using the euro rose 0.4 percent from the second quarter, when it fell 0.2 percent, the EU’s statistics office said.
Economists had forecast 0.5 percent growth, according to the median of 34 estimates in a Bloomberg survey.
National benchmark indexes advanced in all 18 western European markets this week, except Greece and Iceland.
The UK’s FTSE 100 rose 3 percent and France’s CAC 40 surged 2.7 percent. Germany’s DAX gained 3.6 percent as Allianz SE increased.
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