European Stocks Gain After U.S. Adds More Jobs Than Forecast
Royal Bank of Scotland Group Plc (RBS) rallied the most in three months after Chief Executive Officer Stephen Hester forecast a return to profit this year. ThyssenKrupp AG (TKA) soared 8 percent as Germany’s biggest steelmaker said it plans to sell or spin off units to reduce debt. Belgacom SA (BELG) plunged 5.1 percent after cutting its earnings forecast.
The Stoxx 600 gained 1.3 percent to 281.33 at the 4:30 p.m. close in London, erasing an earlier drop. The gauge declined 0.9 percent this week as commodities tumbled. The measure has still climbed 7.3 percent since March 16 as companies from PSA Peugeot Citroen to Ericsson AB reported earnings that topped estimates and the Federal Reserve maintained its pledge to keep interest rates low for an extended period.
“For the announcement to have come in better than expected has given the market a positive snap,” said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers in London. “This is a comforting piece of data which tends to suggest that the U.S. recovery is on track, albeit at a slower rate than most would wish.”
Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, after a revised 221,000 gain the prior month, the Labor Department said today in Washington. Economists projected an April rise of 185,000, according to the median estimate in a Bloomberg News survey. Employment excluding government jobs jumped the most in five years. The jobless rate rose to 9 percent, the first increase since November.
National benchmark indexes rallied in 15 of the 18 western European markets today. Germany’s DAX climbed 1.6 percent and France’s CAC 40 gained 1.3 percent, while the U.K.’s FTSE 100 advanced 1 percent.
Of the 217 companies in the Stoxx 600 that have reported earnings since April 11, 129 have beaten analyst forecasts for per-share profit, according to data compiled by Bloomberg. That compares with 73 percent of U.S. companies in the period.
RBS climbed 5.6 percent to 42.74 pence, rebounding from yesterday’s 2.9 percent slide. The U.K.’s biggest government- owned lender said earnings from its British retail and corporate banking division more than doubled to about 1 billion pounds ($1.6 billion) in the first quarter. The insurance unit, which owns Churchill and Direct Line, posted its first profit in five quarters.
“We are pleased to see the strong momentum” in the global banking and markets division and in insurance, said Atif Latif, an analyst at Guardian Stockbrokers in London.
ThyssenKrupp jumped 8 percent to 32.22 euros, the biggest gain in the Stoxx 600, on plans to sell or spin off units representing about a quarter of its sales as it seeks to cut debt and focus on engineering.
Deutsche Lufthansa AG (LHA) gained 4.1 percent to 15.27 euros after UBS AG upgraded Europe’s second-biggest airline to “buy” from “hold.” Airline stocks also advanced as the price of crude oil fell more than 10 percent this week.
International Consolidated Airlines Group SA jumped 3.3 percent to 254.1 pence after the company, formed from the merger of British Airways and Iberia, posted a profit in its first quarter of operations, beating predictions, as traffic rose and the deal cut costs.
BP Plc (BP/) rallied 3.1 percent to 454.7 pence after Europe’s second-largest oil company won the right to carry out a $7.8 billion share swap with state-owned Russian oil producer OAO Rosneft in return for allowing its TNK-BP venture to take up an Arctic oil exploration deal.
Pandora A/S, the Danish jewelry chain, rallied 7.6 percent to 256 kroner as HSBC Holdings Plc rated the shares “overweight” in new coverage. The 31 percent decline from January this year presents a buying opportunity, HSBC analyst Sophie Dargnies wrote in a note today.
Belgacom lost 5.1 percent to 25.02 euros, the biggest drop since October 2009. The largest telephone company in Belgium lowered its revenue and earnings forecasts after first-quarter sales fell more than analysts estimated because of lower mobile voice revenue and fixed-line losses.
DnB NOR ASA (DNBNOR) plunged 5.3 percent to 80 kroner as Norway’s biggest bank reported first-quarter net income of 2.85 billion kroner ($520 million), missing the 3.45 billion-krone average of 15 analyst estimates compiled by Bloomberg.
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