European stocks posted their first weekly advance since May 17, as China took steps to ease a cash crunch and US data boosted optimism the global economy can withstand a paring of central bank stimulus.
Mediaset SpA jumped 15 percent as Credit Suisse Group AG raised its price target for the shares. Debenhams PLC rallied the most since 2011 after saying it maintained sales even as cold weather reduced spending on summer clothing. Afren PLC rose 8 percent after saying oil found off the coast of Nigeria may exceed its estimates.
The benchmark STOXX Europe 600 Index rose 1.7 percent to 285.02 this week, snapping five weeks of losses. The gauge still posted its first monthly drop since May last year and closed the quarter with a 3 percent decline. It has retreated 8.2 percent since May 22 after US Federal Reserve Chairman Ben Bernanke said the central bank could reduce quantitative easing if the US economy improves sustainably.
“Assuming we see positive economic data for the next few months, then what you should see is a market that can hand off from life support towards some underlying growth,” Alex Friedman, chief investment officer at UBS AG’s wealth-management unit, said on Bloomberg TV this week. “China said essentially that it wants to make sure it doesn’t have a bubble on the credit side, and they clamped down a little bit. That’s a good thing.”
The VSTOXX Index, which measures the cost of using options to hedge against swings in the Euro STOXX 50 Index, fell 9.3 percent this week, halting five consecutive weeks of gains.
China’s money-market rates eased after the People’s Bank of China said it provided funding to some financial institutions to stabilize interbank lending rates and would use short-term liquidity operations and existing loan-facility tools to steady the market. The rates had surged in the week through June 21.
In the US, Atlanta Fed president Dennis Lockhart said investors may have overreacted to Bernanke’s comments on a potential reduction in stimulus. Fed Bank of New York president William Dudley said any decision to slow the pace of asset purchases would not represent a withdrawal of stimulus.
The National benchmark indexes rose in 11 of the 18 western European markets this week. The UK’s FTSE 100 gained 1.6 percent, France’s CAC 40 climbed 2.2 percent and Germany’s DAX Index advanced 2.2 percent.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
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