European Stocks Climb as Carmakers, Retail Shares Lead Advance
European stocks advanced as carmakers and retailers rallied and Portugal’s Prime Minister Jose Socrates resigned, bringing the country closer to getting a bailout from the European Union.
Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) rose more than 3 percent. Next Plc (NXT) jumped 4 percent as revenue increased. Hugo Boss AG climbed 1.7 percent as BofA Merrill Lynch Global Research recommended buying the shares. BHP Billiton Ltd. and Rio Tinto Group led basic-resource shares higher as the mining companies won a battle over tax credits in Australia.
The benchmark Stoxx Europe 600 Index gained 1 percent to 275.77 at the 4:30 p.m. close in London, its third advance this week. The gauge has recouped 5.2 percent from this year’s low on March 16. The strongest earthquake on record in Japan and concern that revolts in the Middle East and North Africa will further disrupt oil supplies had dragged stocks down 10 percent from Feb. 17 through March 16.
“Portugal will be the third member to join the rescue fund, but this was already expected by the market,” said Robert Halver, head of research at Baader Bank AG in Frankfurt. “There’s still a lot of liquidity and the market can go higher.”
The Stoxx 600 has rallied 75 percent since March 2009 as reports showed an improving global economy and corporate profits beat analysts’ estimates. Fifty-four percent of the 313 companies in the benchmark measure that have reported results since Jan. 10 posted per-share earnings that topped the average analyst projection, according to data compiled by Bloomberg.
National benchmark indexes rose in all of the 18 western European markets. France’s CAC 40 Index advanced 1.4 percent. The U.K.’s FTSE 100 Index increased 1.5 percent and Germany’s DAX Index rose 1.9 percent.
Portugal’s Socrates Resigns
In Portugal, Socrates submitted his resignation after parliament rejected the prime minister’s plan to cut the budget, pushing the country closer to needing a European Union bailout. Greece and Ireland accepted EU-led bailouts last year.
Portuguese President Anibal Cavaco Silva said late yesterday he will meet the main political parties on March 25 and the government will retain its powers until he accepts Socrates’s resignation. Parliament voted hours before European Union leaders meet in Brussels to approve measures aimed at drawing a line under the euro area’s sovereign-debt crisis.
In the U.S., a Labor Department report showed fewer Americans filed applications for unemployment benefits last week. Jobless claims declined by 5,000 to 382,000 in the week ended March 19. The number of people receiving benefits fell to the lowest level in almost three years.
A separate report showed orders for long-lasting goods unexpectedly fell in February, reflecting declines in demand for capital goods and military aircraft.
BMW, Daimler Climb
BMW and Daimler, the world’s largest makers of luxury cars, surged 4.2 percent to 57.60 euros and 3.5 percent to 49.02 euros, respectively. European carmakers posted the best performance among 19 industry groups in the Stoxx 600 today, climbing 3.2 percent.
BHP Billiton, the world’s biggest mining company, advanced 1.4 percent to 2,358 pence and Rio Tinto, the third-largest miner, gained 2.5 percent to 4,231.5 pence. The companies won their second mining-tax battle in Australia after the government agreed to allow them to credit future state royalties imposts against a planned 30 percent levy on their profits. Xstrata Plc (XTA) rose 1.6 percent to 1,445 pence.
Next jumped 4 percent to 2,043 pence after the U.K.’s second-biggest clothing retailer said full-year revenue rose to 3.45 billion pounds ($5.55 billion) from 3.41 billion pounds a year earlier. The Leicester, England-based company also posted pretax profit that climbed 9 percent to 551 million pounds, beating the average analyst estimate of 549 million pounds.
Kingfisher Plc (KGF) soared 7.2 percent to 261.4 pence after the owner of B&Q do-it-yourself stores posted 2010 pretax profit of 671 million pounds compared with 547 million pounds in 2009. Full-year sales slipped to 10.45 billion pounds from 10.5 billion pounds.
The U.K. retailers maintained gains even after a report showed the country’s retail sales dropped in February more than economists had predicted after a surge in January when shoppers brought forward spending to beat a tax increase.
Hugo Boss, a German luxury clothier, increased 1.7 percent to 53.76 euros as BofA Merrill Lynch initiated coverage of the stock with a “buy” rating.
Brenntag AG (BNR) increased 4.3 percent to 73.53 euros as the chemicals distributor said full-year after-tax profit increased to 146.6 million euros ($207.8 million) from 500,000 euros as sales climbed. The company also proposed a dividend of 1.40 euros per share.
Premier Oil, Aalberts
Premier Oil Plc (PMO) advanced 4 percent to 1,988 pence as the U.K. oil and gas producer said profit rose 15 percent to $129.8 million after higher crude prices boosted revenue. The company plans to drill 20 exploration wells this year and predicted that production will reach 75,000 barrels of oil equivalent a day in the first quarter of 2012.
Aalberts Industries NV (AALB) jumped 5.5 percent to 16.74 euros as Europe’s biggest maker of fittings used in taps and heaters won a European Union court ruling overturning a 100.8 million-euro antitrust fine.
Cable & Wireless Worldwide Plc (CW/) tumbled 14 percent to 54.2 pence after the telecommunications company said that the next financial year’s gross margins in its legacy voice business will decline more than it had predicted.
Invensys Plc (ISYS) slumped 4.5 percent to 341.2 pence after the the maker of controls for Whirlpool washing machines replaced Chief Executive Officer Ulf Henriksson with Chief Financial Officer Wayne Edmunds with immediate effect.
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