Europe's benchmark stock indexes recorded their biggest weekly gains in eight, paced by companies that do business in the US, amid signs the world's biggest economy is accelerating faster than Europe. Royal Philips Electronics NV and Aegon NV led the gains.
The Stoxx 50 Index fell 0.2 percent to 2315.49. The decline trimmed this week's advance to 2.7 percent, the steepest since it added 3.6 percent in the five days ended April 4. The index slid 0.1 percent last month. The Stoxx 600 rose 0.2 percent, taking its increase since last Friday to 2.8 percent and its monthly advance to 0.9 percent.
Philips and Aegon, which make at least 30 percent of sales in the US, advanced as some investors bet on the positive effect of the country's expanding economy. The shares also benefited from optimism the US dollar will rise further, boosting the euro value of profits.
"Exporters are the stocks to buy when the dollar keeps rising and we get further signs of an economic recovery in the US," said Andreas Gartner, who helps manage US$1.8 billion in equities at SEB Investment-Fonds GmbH in Frankfurt. "The U.S. will again be the engine for economic growth."
Benchmark indexes rose in all of the 17 Western European markets this week except for Austria, Denmark and Ireland.
Germany's DAX Index climbed 4 percent. France's CAC 40 Index added 2 percent. London's FTSE 100 has risen 1.7 percent since Friday.
Philips, Europe's largest maker of consumer electronics, climbed 11 percent to 16.61 euros since last Friday. The company gets about 30 percent of sales in the US.
"We are closely following some stocks that have slumped recently because of the dollar's drop," said Patrick Nielsen, who helps manage the equivalent of US$12 billion at Mapfre Inversion SV in Madrid, a tenth of which is invested in equities.
Philip's shares fell 10 percent in the first three weeks of last month. The company said last week the drop in the dollar against the euro is hurting sales at its semiconductor and consumer-electronics businesses.
Aegon, which relies on the US for 60 percent of its profit, had a weekly gain of 9.5 percent to 8.03 euros. It shed 20 percent in the first three weeks of the month.
SEB's Gartner said he is getting "increasingly uncomfortable" with his strategy of favoring health-care and utility stocks and is considering boosting his holdings of companies such as Volkswagen AG and Siemens AG.
Volkswagen climbed 0.8 percent to 30.37 euros this week.
Siemens, Germany's largest engineering company, rose 4.1 percent to 40.27 euros. The company makes a fourth of sales in the US and has some 75,000 employees there.
Deutsche Bank AG, Europe's second-largest bank, advanced 8.2 percent to 50.30 euros since last Friday. The German lender plans to expand its commodities unit after the departure of traders such as Enron Corp caused its energy-trading volumes to more than triple in the past year.
"After the dislocation in the market surrounding the fall of Enron, we felt there was space for an institution with a credit rating and balance sheet like ours," Kerim Derhalli, global head of commodities in London, said in an interview. "It's a great time to get in while others are getting out."
Bayer AG, the second-biggest German drugmaker, gained 3.9 percent to 17.45 euros since last Friday. The company moved closer to winning US approval of its impotence drug, Levitra, by persuading a government panel that it probably won't cause dangerous changes in heart rhythm.
Infineon Technologies AG, Europe's second-biggest chipmaker, climbed 13 percent to 7.48 euros this week. The company gets almost a quarter of its sales in the US. The stock extended its weekly gain today after Goldman, Sachs & Co forecast demand for DRAM chips, Infineon's main source of revenue, is rising as consumer confidence improves.
Rolls-Royce Plc was the biggest gainer in the Stoxx 600 this week. The aircraft-engine maker soared 29 percent to ?1.2375 after repeating a forecast that earnings this year will grow on demand for engine spare parts and repairs and saying it will accelerate cost cuts.
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