European stocks advanced for the fourth time in five days, extending a four-week high for the Stoxx Europe 600 Index, as a report on U.K. manufacturing helped to further ease concern that the economic recovery is faltering.
GN Store Nord A/S (GN) rallied 8 percent after an arbitration tribunal awarded the world’s biggest maker of mobile headsets about 2.2 billion kroner ($380 million). E.ON AG (EOAN) and RWE AG (RWE) each climbed 1.8 percent as Chancellor Angela Merkel’s government agreed to extend the life of nuclear power plants owned by Germany’s largest utilities.
The Stoxx 600 (SXXP) rose 0.2 percent to 260.94 at the 4:30 p.m. close in London as two stocks gained for each one that declined. The gauge advanced the most since July last week as reports showed accelerating growth in U.S. and Chinese manufacturing and increased hiring by American companies. Today’s Engineering Employers Federation data showed U.K. factory production grew at a record pace in the third quarter on surging export demand.
“People have to recognize we’re not facing economic Armageddon,” said Mark Tinker, global equity-portfolio manager in London for Axa Framlington, which oversees about $30 billion. “I’ve got wind in my sails coming from earnings and the growth that I can see globally. There are some very good arguments for investing in equities,” he said on Bloomberg Television’s “Start Up” with Maryam Nemazee.
National benchmark indexes advanced in all of the 18 western European markets, except Denmark. France’s CAC 40 and Germany’s DAX (DAX) rose 0.3 percent, while the U.K.’s FTSE 100 increased 0.2 percent. U.S. equity markets were closed today for the Labor Day holiday.
The number of U.K. manufacturers saying sales rose in the three months through September exceeded those reporting declines by 33 percent, compared with 30 percent in the second quarter, the EEF and accountancy firm BDO Stoy Hayward LLP said in a quarterly survey released today. That’s the highest since the report began in 1995. A gauge of exports also rose to a record.
The Stoxx 600 has surged 65 percent from a 12-year low in March 2009 as central banks around the world attempted to keep borrowing costs low. European Central Bank President Jean-Claude Trichet this month extended emergency lending measures for banks into 2011, remaining in crisis mode amid the risk of a renewed U.S. recession.
ECB Governing Council member Ewald Nowotny today said policy makers will wait until December before discussing how to withdraw emergency measures to give the economy time to gather strength.
“We certainly won’t discuss the first quarter before December of this year” Nowotny told Bloomberg News in an interview in Bucharest. “We’re still facing an economic development with a very high uncertainty in many respects. It’s certainly too early to take a clear position.”
GN Store surged 8 percent to 45.8 kroner, extending last week’s 12 percent rally. Telekomunikacja Polska SA was ordered to pay DPTG I/S, which is owned by GN Store and TDC A/S (TDC), about 2.9 billion kroner after a court said Poland’s largest phone service provider still owed the Danish companies for work they did in the early 1990s.
TDC, whose share of the award was about 700 million kroner, added 0.2 percent to 42.08 kroner.
E.ON climbed 1.8 percent to 23.34 euros and RWE gained 1.8 percent to 54.21 euros. Coalition leaders in Berlin agreed to let seven older reactors built before 1980 to run eight years longer while 10 younger plants would be allowed to run another 14 years, said Klaus Breil, the ruling Free Democrats energy spokesman, who participated in the talks. That would mean an average extension of 12 years for the last 17 plants in operation, he said.
BP Plc (BP/) climbed 1.2 percent to 406.5 pence after the Sunday Times said the energy company has increased its target for asset sales to $40 billion from $30 billion to cover the cost of cleaning up the Gulf of Mexico oil spill. Mark Salt, a BP spokesman, declined to comment on the report.
BioMerieux SA (BIM) advanced 3.1 percent to 83.32 euros after the maker of tests for HIV and hepatitis said first-half net income rose 14 percent to 72 million euros ($93 million).
Partners Group Holding AG (PGHN), the Switzerland-listed money manager, climbed 5.9 percent to 155.9 Swiss francs after posting an increase in first-half profit.
EasyJet Plc (EZJ) gained 1.3 percent to 381.1 pence as Europe’s second-largest discount airline said its August passenger numbers rose to 5.2 million and the proportion of seats filled increased 0.5 percentage point to 92.3 percent.
GlaxoSmithKline Plc (GSK) slid 1.5 percent to 1,249 pence. The British Medical Journal’s Editor-in-Chief Fiona Godlee wrote that the U.K. drugmaker’s Avandia diabetes treatment should be withdrawn from the market as European regulators prepare to review the drug’s safety.
Societe Television Francaise 1 (TFI), the owner of France’s most- watched TV channel, declined 3.5 percent to 12.02 euros after Deutsche Bank AG downgraded the shares to “sell” from “hold.”
To contact the reporter on this story: Adam Haigh in London at email@example.com