European Stocks Gain, Paring Weekly Drop, as U.S. Consumer Sentiment Rises
A furnace at a ThyssenKrupp AG steel plant
Wolfgang von Brauchitsch/Bloomberg
ThyssenKrupp AG climbed 3 percent after raising its forecast for 2010 profit.
ThyssenKrupp AG climbed 3 percent after raising its forecast for 2010 profit. Photographer: Wolfgang von Brauchitsch/Bloomberg
Aug. 13 (Bloomberg) -- Gilles Moec, an economist at Deutsche Bank AG, talks about the outlook for growth in Europe after German gross domestic product rose 2.2 percent from the first quarter, the fastest pace since the country’s reunification two decades ago. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Aug. 13 (Bloomberg) -- Lothar Mentel, chief investment officer at Octopus Investments Ltd., talks about the outlook for U.S. investments and commodities. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
European stocks gained, paring this week’s decline for the Stoxx Europe 600 Index, after a private report in the U.S. showed consumer confidence rose more than economists estimated.
Aviva Plc surged 5.5 percent as two people with knowledge of the situation said RSA Insurance Group Plc made a 5 billion- pound ($7.8 billion) bid for Aviva’s general insurance business in the U.K., Canada and Ireland. Schibsted ASA, Norway’s largest media company, jumped 12 percent after reporting second-quarter profit that topped analysts’ estimates.
The Stoxx 600 climbed 0.3 percent to 255.56 at the 4:30 p.m. close in London, paring this week’s decline to 1.2 percent. The measure swung between gains and losses at least eight times today as a report showed faster-than-forecast expansion in the 16-nation euro area, while investors speculated that the region’s economy may still stall later this year, dragged down by the indebted nations on Europe’s periphery.
“The Michigan confidence number does provide some hope,” said Giles Watts, the head of dealing at City Index Ltd. in London. “It’s been a choppy day and the rest of the month could be as well.”
The Stoxx 600 remains 6.1 percent below this year’s high reached April 15 amid concern that austerity measures by European governments to curb deficits will harm the economy. Almost $2 trillion has been wiped off the value of global equities this week as the Federal Reserve on Aug. 10 said the pace of recovery will probably be “more modest” than forecast.
U.S. Confidence
Confidence among U.S. consumers rose in August, a sign the biggest part of the world’s largest economy may soon stabilize. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 69.6 following a reading of 67.8 in July that was the lowest since November. The gauge was forecast to rise to 69, according to the median estimate of 65 economists in a Bloomberg News survey.
National benchmark indexes rose in 8 of the 18 western European markets today. The U.K.’s FTSE 100 gained 0.2 percent. France’s CAC 40 dropped 0.3 percent and Germany’s DAX retreated 0.4 percent.
The Stoxx 600 has climbed 10 percent from this year’s low on May 25 as corporate earnings helped alleviate concern about the economy. About 55 percent of the 272 companies in the Stoxx 600 to have posted results since July 12 have topped net income estimates, according to data compiled by Bloomberg. That compares with 64 percent of the 436 companies on the S&P 500 that reported during the same period, the data show.
Aviva, Schibsted
Aviva jumped 5.5 percent to 387.4 pence. RSA’s bid was rejected by Aviva and there are no current negotiations between the two companies, said the people, declining to be identified because the matter is private. Officials at Aviva and RSA, the U.K.’s biggest non-life insurer, wouldn’t comment.
Schibsted surged 12 percent to 144.5 kroner, the biggest gain since November. The company reported second-quarter net income of 710 million kroner ($114 million), topping the 586 million-krone average of four analysts’ estimates surveyed by Bloomberg.
Schindler Holding AG climbed 6.1 percent to 96.75 Swiss francs, as it announced a plan to merge one of its businesses with a unit of Droege International Group AG.
ThyssenKrupp AG, Germany’s largest steelmaker, climbed 1.5 percent to 23.15 euros after raising its forecast for 2010 profit.
Vedanta, Cairn
Vedanta Resources Plc slumped 5.9 percent to 2,053 pence, extending this week’s slump to 20 percent. The mining company controlled by billionaire Anil Agarwal is in advanced discussions to buy a majority stake worth more than $7 billion in Cairn Energy Plc’s Indian unit, according to two people with knowledge of the matter.
Cairn India, 62 percent held by Edinburgh-based Cairn Energy, is valued at about $14 billion. Cairn Energy gained 3.5 percent to 468.3 pence in London. Delhaize Group SA, the owner of the Food Lion supermarkets in the U.S., tumbled 11 percent to 51.75 euros, the biggest drop since 2002, after lowering its full-year profit forecast because of shrinking American sales.
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