Deutsche Bank surged the most in almost a year as Germany’s biggest bank reported a 17 percent increase in first-quarter profit. Suez Environnement climbed 4 percent after also posting higher earnings. SAP AG (SAP) sank the most in 1 1/2 years after reporting a smaller-than-expected increase in profit.
The benchmark Stoxx Europe 600 Index rose 0.3 percent to 283.04 at the 4:30 p.m. close in London, the highest since March 3. The gauge has surged 8 percent from this year’s low on March 16 as better-than-estimated company results boosted confidence the economic recovery is on track.
“Equity markets are supported by powerful and strong earnings on the one hand and low interest rates on the other hand,” said Philipp Musil, who helps manage about $12 billion at Semper Constantia Privatbank AG in Vienna. “The market ignores all other crises around us right now. There’s no alternative to investing in equities.”
Of the 97 companies in the Stoxx 600 that have reported earnings since April 11, 60 have beaten analyst estimates for per-share profit, according to data compiled by Bloomberg. That compares with 77 percent of U.S. companies having beaten estimates for per-share profit in the period.
Fed Chairman Ben S. Bernanke signaled yesterday in his first press conference after a rate decision that the U.S. central bank will maintain its record monetary stimulus, contrasting with policy makers in Asia and Europe who are seeking to calm inflation. The Fed kept its target rate for overnight lending between banks at zero to 0.25 percent, as forecast by all of the economists in a Bloomberg News survey.
A report today showed the U.S. economy grew at a slower pace than forecast in the first quarter as consumer purchases cooled, home construction fell and government spending declined. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department said. Separate data showed new applications for unemployment benefits unexpectedly rose last week to the highest level in three months.
In Germany, a report showed unemployment fell below 3 million for the first time in almost 19 years in April in adjusted terms, increasing the likelihood that household spending will boost economic growth.
In the U.K., consumer confidence slumped to its weakest level since the depth of the recession in February 2009 as the government’s budget cuts began in earnest, a report by GfK NOP Ltd. showed.
National benchmark indexes rose in 15 of the 18 western European markets. Germany’s DAX gained 1 percent and France’s CAC 40 advanced 0.9 percent, while the U.K’s FTSE 100 added less than 0.1 percent.
Deutsche Bank climbed 4.8 percent to 43.79 euros as net income increased to 2.1 billion euros ($3.1 billion), the second-best quarterly result ever, from 1.8 billion euros in the year-earlier period, the Frankfurt-based bank said in a statement today. Earnings surpassed the 1.8 billion-euro average estimate of 11 analysts surveyed by Bloomberg.
Suez Environnement rose 4 percent to 15.53 euros, the highest price in almost two months. Europe’s second-largest water company said first-quarter profit climbed 29 percent following a Spanish acquisition and as the economic recovery boosted demand for waste collection.
WPP Plc (WPP) gained 2.9 percent to 781.5 pence. The world’s largest advertising company said first-quarter revenue increased 7 percent, led by a faster-than-expected recovery in mature markets such as the U.S. and Germany, and raised its full-year sales forecast.
Standard Life Plc (SL/) rallied for a sixth day, the longest winning streak since September, as Scotland’s biggest insurer said first-quarter revenue rose 25 percent, beating analysts’ estimates, on higher demand for corporate pension products in the U.K. The stock climbed 3.2 percent to 226.1 pence.
Safran SA (SAF) soared 6.2 percent to 25.57 euros, the largest advance since July. Europe’s second-largest maker of aircraft engines said first-quarter revenue rose 11 percent, boosted by defense products such as infrared goggles and plane equipment such as landing gear and engine casings.
Kesko Oyj (KESBV) surged 8.5 percent to 35.10 euros, the biggest gain in nine months and the second-best performance in the Stoxx 600 today. Finland’s biggest retailer reported first-quarter net income of 25 million euros, beating the 24.7 million-euro mean estimate of eight analysts surveyed by Bloomberg.
Stagecoach Group Plc (SGC) advanced 4.4 percent to 246.9 pence, the highest price in 2 1/2 years. The operator of U.K. business commuter-rail services said its overall group profitability has remained “strong” with all divisions showing revenue growth in the current year.
ABB Ltd. (ABBN) rose 3.9 percent to 23.86 Swiss francs as Deutsche Bank recommended the world’s largest maker of power-transmission gear. Bank Vontobel AG also recommended the stock, citing an earlier-than-expected recovery in the power division.
SAP dropped 5.7 percent to 43.09 euros, the biggest decline since October 2009. The world’s largest maker of business- management software said first-quarter net income rose 4.1 percent to 403 million euros. Analysts predicted profit of 496 million euros, the average of 13 estimates. Operating profit based on non-IFRS accounting rules gained 26 percent to 779 million euros, trailing the 833 million-euro estimate.
Unilever slid 2.4 percent to 1,942 pence in London, ending five days of gains. The world’s second-biggest consumer-goods company reported first-quarter sales that missed estimates and said profitability will drop in the first half as increased commodity costs hit earnings more than it had earlier expected.
Erste Group Bank AG (EBS) slipped 1.4 percent to 34.83 euros. Eastern Europe’s second-biggest lender said first-quarter profit rose 2 percent, less than predicted by analysts, as lending margins declined due to low demand for credit.
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