European stocks climbed for a second week, led by commodities producers and insurers, as rising metal prices and better-than-expected earnings outweighed concern the US may fall into a recession.
Rio Tinto Plc, the world's third-biggest mining company, and Kazakhmys Plc rallied as copper advanced to the highest level in almost two years. A measure for European insurers had its biggest weekly gain since November after ING Groep NV reported better-than-expected profit and Allianz SE raised its dividend.
"Positive earnings supported the market this week," said Raimund Saxinger, who helps manage the equivalent of about US$26 billion at Frankfurt-Trust in Frankfurt. "The panic that dominated the past weeks is gone and people are getting back to business."
The STOXX 600 Index climbed 0.8 percent to 319.88. The gauge has lost 12 percent this year on concern credit-market turmoil and slowing expansion in the US, the world's largest economy, will curb profit growth.
Analysts increased their estimates for earnings growth at STOXX 600 companies to 9.2 percent this year, up from 8.6 percent two weeks ago, according to Bloomberg data. Shares in the STOXX 600 trade at an average 11.1 times estimated earnings, near a five-year low reached on Jan. 25.
Utilities limited gains after Electricite de France SA, Europe's biggest power producer, and RWE AG, Germany's second-largest utility, said rising costs weigh on earnings growth.
National benchmarks rose in 11 of the 18 western European markets. Germany's DAX Index slipped 0.4 percent, while France's CAC 40 increased 1.1 percent. The UK's FTSE 100 rallied 1.7 percent. The STOXX 50 climbed 1 percent and the Euro STOXX 50, a measure for the euro region, gained 0.5 percent.
The STOXX Basic Resources Index increased 4.9 percent, the steepest gain among the benchmark's 18 industry groups. Copper climbed to the highest in almost two years in London after stockpiles of the metal fell to the lowest in 16 months.
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