European stocks climbed for a third day, led by technology companies, after Texas Instruments (TXN) Inc. agreed to buy National Semiconductor Corp., fueling optimism that company spending will push shares higher.
STMicroelectronics NV (STM) and Infineon Technologies AG (IFX), Europe’s largest chipmakers, led gains on the Stoxx Europe 600 Index. Storebrand ASA (STB) rallied 4.5 percent as Morgan Stanley added the insurer’s shares to its best ideas list.
The Stoxx 600 advanced 0.2 percent to 280.91 at the 4:30 p.m. close in London. The benchmark has risen 7.1 percent from this year’s low on March 16 as investors speculated that the economic recovery will withstand Japan’s worst earthquake on record and popular revolts in the Middle East and north Africa.
“More shareholder-friendly policies are being made possible thanks to past corporate deleveraging and significant cash positions, with a mix of dividends, buybacks or M&A moves,” Alain Bokobza, the head of asset allocation strategy at Societe Generale SA wrote in a report dated yesterday. “We maintain a heavy exposure to European equities.”
National benchmark indexes rose in 6 of the 18 western European markets. The U.K.’s FTSE 100 Index lost 0.2 percent, while France’s CAC 40 Index and Germany’s DAX Index both retreated less than 0.1 percent.
Stocks in Europe climbed even as a U.S. gauge of service industries fell, China raised interest rates and Portugal’s credit rating was cut at Moody’s Investors Service.
The Institute for Supply Management’s gauge of service industries decreased in March. The index slipped to 57.3 from 59.7 in February. That fell short of the average economist estimate for a reading of 59.5.
The Federal Reserve will publish the minutes from the Federal Open Market Committee’s March 15 meeting at 2 p.m. Washington time, after the close of trading in Europe.
China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles developing in the fastest-growing major economy. The benchmark one-year lending rate will increase to 6.31 percent from 6.06 percent, effective from tomorrow, the People’s Bank of China said on its website at the end of a national holiday.
Portugal’s credit rating was cut by Moody’s, which said the government will probably seek a European bailout. Moody’s downgraded Portugal’s long-term government bond ratings by one notch to Baa1 from A3, and said the rating remains under review for another possible downgrade.
STMicroelectronics, Europe’s largest chipmaker, rose 2.9 percent to 9.04 euros. Infineon Technologies, the region’s second-biggest, increased 3.9 percent to 7.75 euros. Texas Instruments, the second-largest U.S. chipmaker, agreed to buy National Semiconductor for about $6.5 billion, its biggest acquisition, to expand its analog semiconductors business.
The Stoxx 600 has surged 78 percent from its low in March 2009 as government stimulus measures, higher-than-estimated earnings and corporate takeovers boosted investors’ optimism. There have been 6,277 deals announced globally this year, totaling $642.9 billion, a 27 percent increase from the $506.5 billion in the same period in 2010, according to data compiled by Bloomberg. Yesterday, stocks in Europe rose as Solvay SA (SOLB) agreed to buy Rhodia SA for 3.4 billion euros ($4.8 billion).
TUI, Home Retail
TUI AG (TUI1) climbed 3 percent to 8.78 euros. The owner of Europe’s biggest tour operator has held talks with potential buyers of a stake in its container shipping unit Hapag-Lloyd AG, company spokesman Robin Zimmermann said in an e-mailed statement. Reuters earlier reported that a state fund in Oman has bought a 15 percent stake in Hapag-Lloyd.
TUI has said it wants to invest proceeds from a possible initial public offering of Hapag-Lloyd in its tourism business. TUI Travel, which is 51 percent owned by TUI, jumped 2.4 percent to 228.5 pence.
Home Retail Group Plc (HOME) rose 1.7 percent to 208.1 pence after U.S. investment firm Madison Dearborn Partners LLC increased its stake to 4.25 percent, the owner of the Argos chain said yesterday. That compares with the 3.2 percent stake that Home Retail announced in mid March.
Storebrand gained 4.5 percent to 49.53 kroner as Morgan Stanley added the insurer’s shares to its best ideas list.
GDF Suez (GSZ) SA and Electricite de France SA (EDF) both sank after French Prime Minister Francois Fillon said the pair will not raise natural gas prices on July 1. GDF, France’s former gas monopoly, slid 1.9 percent to 27.73 euros. EDF retreated 3.7 percent to 28.45 euros. Fillon also said the government will limit an increase in the regulated power prices charged by EDF.
Bayer, Siemens Slide
Bayer sank 3.6 percent to 54.65 euros. Johnson & Johnson and Bayer’s experimental pill Xarelto raised bleeding rates in a study, even as it prevented blood clots from forming in critically ill hospital patients as well as a standard injection.
Siemens AG (SIE) slipped 1.3 percent to 96.87 euros as Chief Financial Officer Joe Kaeser said growth will slow in the second half of the year at a presentation the Munich-based company gave to analysts today.
Vestas Wind Systems AS (VWS), the world’s largest turbine maker, slumped 4.9 percent to 213.40 kroner. The stock was cut to “hold” from “buy” at Nordea Bank AB.
Parmalat SpA (PLT) lost 2.5 percent to 2.31 euros. Groupe Lactalis, the French maker of President unsalted butter, is evaluating whether to make a takeover bid for Parmalat or sell its 29 percent holding, daily Il Sole 24 Ore reported, without saying where it got the information.
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