European Stocks, U.S. Stock-Index Futures Rise; BP Advances
European stocks rallied, snapping four days of losses for the Stoxx Europe 600 Index, as investors speculated that the economy will avoid another recession. BP Plc rallied 2.1 percent after saying its Macondo well in the Gulf of Mexico has been permanently sealed. Brit Insurance N.V. jumped 4.1 percent after Apollo Global Management teamed up with CVC Capital Partners Ltd. to make a sweetened offer for the company. SGS SA rose to a record.
The benchmark Stoxx 600 gained 1.3 percent to 266.22 at the 4:30 p.m. close in London, as all 19 industry groups advanced. The gauge remains 2.2 percent below its high for 2010 in April amid conflicting reports about the state of the economy as Europe’s most indebted nations slash spending and China moves to cool growth. Still, the measure has rallied 15 percent since its low this year on May 25 on signs that the debt crisis won’t choke off the recovery.
“Investors are getting more confident about macro-economic developments and global growth is still solid overall,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “Sentiment is supportive for risky assets. I’m still positive for the mid- term.”
The Stoxx 600 retreated 0.7 percent last week as the cost to insure Irish government bonds jumped amid concern that the nation’s banks may need further government aid. Stocks rebounded today as Moody’s Investors Service said the U.K.’s top credit rating will withstand the challenging economic outlook as the government stabilizes the public finances.
Even so, Portuguese and Irish bonds fell again today, with the yield premium investors demand to hold 10-year Portuguese and Irish debt instead of bunds reaching a record. Ireland’s central bank governor Patrick Honohan said the government needs to cut the country’s budget deficit at a faster pace to shore up investor confidence.
National benchmark indexes advanced in 15 of the 18 western European markets. France’s CAC 40 rose 1.8 percent, while the U.K.’s FTSE 100 rose 1.7 percent. Germany’s DAX Index gained 1.4 percent. Greece’s ASE Index led declining indexes, losing 2.1 percent, and Portugal’s PSI-20 slipped 0.2 percent.
BP gained 2.1 percent to 411.35 pence as U.S. officials said the company killed its Macondo well after creating another cement seal, plugging the source of the largest offshore oil spill in U.S history.
Hammerson Plc climbed 3.3 percent to 395.3 pence, leading a gauge of European real estate shares to the second-biggest gain among 19 industry groups in the Stoxx 600. Hammerson and Oman may try to sell its office and retail site at Bishop’s Square in London for about 550 million pounds ($860 million), the Financial Times reported, without saying where it got the information.
Brit Insurance jumped 4.1 percent to 1,028 pence, the highest level since April 2008. Brit expects to accept the offer of 10.75 pounds a share in cash and a further 25 pence a share depending on the value of its assets at the end of the year, the insurer said in a statement after the close of markets on Sept. 17. Without the 25 pence contingent value right, the private equity firm’s bid is worth 851 million pounds ($1.3 billion).
SGS, the world’s biggest goods inspector, gained 5.4 percent to 1,694 Swiss francs after saying it plans to reach revenue of 8 billion Swiss francs ($7.9 billion) by 2014. The company also aims for earnings per share of about 140 francs, helped by “strong organic growth,” it said today in a statement.
Valeo SA rallied 5.5 percent to 31.42 euros. The French markets regulator said Pardus Capital Management LP’s stake in the auto-parts maker is now 5.14 percent.
Boost in Earnings
Suedzucker AG climbed 4.5 percent to 15.68 euros, the biggest advance in eight months. The world’s largest sugar refiner said it expects full-year operating profit to increase to more than 450 million euros from 403 million euros last year.
“The boost in earnings will be driven predominantly by the segments sugar and CropEnergies,” Suedzucker said in a statement today.
CropEnergies AG, majority owned by Suedzucker, jumped 14 percent to 3.48 euros, the biggest increase this year. The company raised its full-year forecasts after what it said was a “strong” first half.
Safran SA rose 5.2 percent to 20.4 euros. The company still wants to buy Zodiac Aerospace, Chief Executive Officer Jean-Paul Herteman said on a conference call today. Safran, which today said it’s buying most of the assets of L-1 Indentity, sees synergies of $30 million from the purchase.
Fiat SpA climbed 4.7 percent to 10.85 euros, the highest price since January. Sanford C. Bernstein & Co. upgraded the Italian carmarker to “outperform” from “market perform.” The brokerage increased its price estimate to 15 euros from 12 euros.
K+S AG, Europe’s largest potash producer, soared 4.7 percent to 45.22 euros. China is close to a decision on a rival bid to BHP Billiton Ltd.’s for control of Potash Corp. of Saskatchewan Inc., the Globe and Mail reported, citing people familiar with the situation.
Halfords Group Plc tumbled 4.6 percent to 441 pence, a seventh day of declines for the longest falling streak in 15 months. The U.K.’s biggest seller of car parts and bicycles was downgraded to “neutral” from “buy” at Redburn Partners LLP.
Hikma Pharmaceuticals Plc sank 5.2 percent to 726 pence, the worst performance in the Stoxx 600. The Jordanian drugmaker listed in London was downgraded to “sell” from “reduce” at Numis Securities Ltd.
Actelion Ltd. dropped 3.9 percent to 44.06 Swiss francs. Switzerland’s largest biotechnology company said U.S. prosecutors asked for documents related to marketing and sales practices for the Tracleer lung medicine.