Stocks Rally in Europe for First Time in Five Days

European stocks gained for the first time in five days as automakers and mining companies rallied after the Group of 20 nations pledged to safeguard economic growth while cutting debt.

PSA Peugeot Citroen climbed 2.8 percent as La Lettre de L’Expansion reported that France’s biggest carmaker has lifted its sales target for the DS3 model. Rio Tinto Group advanced 2.1 percent as copper climbed for a third day. Premier Oil Plc surged 7.1 percent after the explorer said a North Sea well encountered oil-bearing sandstones.

The Stoxx Europe 600 Index rose 1.2 percent to 251.36, the biggest gain in two weeks. The gauge, which has fallen 7.6 percent from this year’s high on April 15 amid concern about the impact of Europe’s debt crisis, remains 59 percent higher than in March last year as government stimulus measures helped trigger a recovery in the global economy.

“This policy mix we’re seeing now -- easy money, tight fiscal -- historically has been good for stocks,” Larry Kantor, head of research at Barclays Capital in New York said in a Bloomberg Radio interview. “We particularly like stocks the U.S. and Europe. Indicators of confidence whether its consumer, or business, really haven’t been dented.”

National benchmark indexes rose in all 18 western European markets, except Portugal and Greece. France’s CAC 40 advanced 1.6 percent and Germany’s DAX increased 1.4 percent. The U.K.’s FTSE 100 gained 0.5 percent.

Banking Oversight

Global efforts to tighten banking oversight have gained momentum, U.S. President Barack Obama said following the G-20 meeting this weekend. Group leaders agreed to pursue higher capital requirements for banks once their economic recoveries take root and endorsed targets to cut deficits at least by half by 2013 and stabilize their debt-to-output ratios by 2016.

Central banks and governments should consider withdrawing extraordinary measures to avoid skewing investment decisions and delaying companies’ recording of losses, the Bank for International Settlements said.

“The time has come to ask when and how these powerful measures can be phased out,” the Basel, Switzerland-based BIS said in its annual report published today. “The cumulating side effects themselves pose a danger that, at the very least, implies exiting sooner than may be comfortable for many.”

Peugeot, Porsche

Peugeot rose 2.8 percent to 22.30 euros, leading a gauge of auto shares to the biggest gain among 19 industry groups in the Stoxx 600. The carmaker has lifted its 2010 sales target for the DS3 model to 70,000 from 45,000, La Lettre de L’Expansion reported, without citing anyone.

Preferred shares of Porsche SE, the maker of the 911 sports car, climbed 3.1 percent to 37.16 euros as the stock was upgraded to “buy” from “sell” at Bankhaus Metzler.

Rio Tinto, the world’s third-biggest mining company, climbed 2.1 percent to 3,256 pence as copper, lead, nickel and zinc advanced on the London Metal Exchange. Fresnillo Plc, the largest primary silver producer, rallied 4.9 percent to 1,052 pence.

Premier Oil surged 7.1 percent to 1,266 pence, the most in more than a year. The U.K. explorer said the Catcher East sidetrack well in the U.K. Central North Sea encountered “excellent quality” oil-bearing sandstones.

Infineon, Vallourec

Infineon Technologies AG advanced 2.6 percent to 5.08 euros. German Chancellor Angela Merkel has agreed to help Russia’s AFK Sistema negotiate with Infineon about purchasing a stake in the German semiconductor maker, Financial Times Deutschland reported. Infineon and Sistema are not in talks on a stake purchase, spokesmen at the two companies said.

Vallourec SA, which produces steel pipes for the oil and gas industry, rose 3.5 percent to 149.5 euros. The company has seen a rebound in volumes after a low point reached in the first quarter, Chairman Philippe Crouzet told La Tribune in an interview. Vallourec is benefiting from a recovery in the U.S., Brazil and Asia, while the economy in Europe is “less good,” Crouzet told the newspaper.

Banco Popolare SC jumped 3.9 percent to 4.75 euros. The stock was rated “buy” at Societe Generale SA, which initiated coverage of Italy’s fourth-biggest bank and set a price estimate of 5.90 euros.

“Banco Popolare is a restructuring story, with significant upside potential,” Paris-based analyst Carlo Tommaselli wrote in a note today.

Bwin Gains

Bwin Interactive Entertainment AG climbed 3 percent to 36.97 euros as the Austrian online betting company denied a report that merger talks with PartyGaming Plc have collapsed.

“Bwin is currently holding talks with several potential partners in the online gaming sector on possible co-operation and/or acquisitions,” the company said. PartyGaming slid 3.4 percent to 242.5 pence in London.

Hennes & Mauritz AB fell 1.8 percent to 216.5 kronor after Chief Executive Officer Karl-Johan Persson told La Tribune that Europe’s second-largest clothing retailer isn’t for sale. The Persson family, which holds 37 percent of the shares and 70 percent of the voting rights, considers H&M a “long-term investment,” Persson, the grandchild of the Swedish founder, told the newspaper.

Standard Chartered Plc fell 1.8 percent to 1,710 pence as the British bank that earns most of its profit in Asia said the European sovereign-debt crisis caused a “softening” of first- half revenue.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

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