Stocks Rise in Europe on Earnings, Led by InterContinental, Deutsche Post
Stock Chart for InterContinental Hotels Group PLC (IHG)
European stocks climbed as InterContinental Hotels Group Plc (IHG) and Deutsche Post AG (DPW) posted increased earnings, helping to reassure investors that the global economic recovery remains intact.
InterContinental Hotels surged 3.9 percent after reporting a 28 percent jump in first-quarter profit as travel recovered in the Americas. Deutsche Post gained 1.3 percent after the world’s biggest carrier of air and sea freight by volume reported first- quarter earnings before interest and taxes that exceeded the average of 14 analyst estimates compiled by Bloomberg.
The Stoxx 600 rose 0.9 percent to 282.92 at the 4:30 p.m. close in London as more than six stocks climbed for every one that dropped. The gauge has gained 7.9 percent from this year’s low on March 16 as companies including PSA Peugeot Citroen and Ericsson AB reported earnings that topped analysts’ estimates and the U.S. Federal Reserve maintained its pledge to keep interest rates low for an extended period.
“The good thing for Europe is not that there are not problems, but for the most part they’ve already been reflected in prices,” said Russ Koesterich, the global chief investment strategist for the IShares unit of BlackRock Inc., which oversees $3.65 trillion as the world’s largest asset manager. “One of the factors supporting global equity markets, despite all the headwinds, is the fact that global rates for the most part are staying very low. That is going to continue for the next few quarters,” he said in an interview with Bloomberg Television in Milan.
National benchmark indexes climbed in 15 of the 18 western European markets today. Germany’s DAX Index (DAX) advanced 1.2 percent and France’s CAC 40 Index (CAC) added 1.1 percent. The U.K.’s FTSE 100 Index (UKX) gained 1.3 percent.
Per-share profit at the 234 companies that have reported results in the Stoxx 600 index since April 11 has expanded 8.8 percent, with 59 percent beating analysts’ estimates, according to data compiled by Bloomberg.
In the U.K., gauges of house prices and retail sales climbed in April. The Royal Institution of Chartered Surveyors said its U.K. house-price gauge rose to its highest level in nine months in April as demand for homes stabilized. The British Retail Consortium said U.K. retail sales surged the most in five years last month as public holidays and the warmest April on record spurred spending.
China’s exports increased 29.9 percent from a year earlier to $155.7 billion in April and the trade surplus jumped to $11.4 billion, according to government data released today. The surplus was more than triple the median forecast of $3.2 billion in a Bloomberg survey of economists.
InterContinental, Deutsche Post
InterContinental Hotels climbed 3.9 percent to 1,298 pence as the owner of the Holiday Inn brand said first-quarter profit rose 28 percent as travel recovered in the Americas, its biggest market.
Deutsche Post rose 1.3 percent to 13.66 euros as it reported that first-quarter earnings before interest and taxes increased 23 percent to 629 million euros ($903 million), beating the average estimate of 588 million euros based on a Bloomberg survey of 14 analysts. The company posted net income for the period of 325 million euros, matching the 325 million- euro average of seven analyst estimates compiled by Bloomberg. Profit, adjusted for the one-off gain from the disposal of Postbank last year, increased 27 percent, the company said.
Rio Tinto Group climbed 2.4 percent to 4,235.5 pence as aluminum, lead and nickel advanced in London.
Greek Banks Rally
Three Greek banks were amongst the five best-performing stocks in the Stoxx 600 today. Alpha Bank SA surged 9.3 percent to 3.76 euros, its largest gain in three months. European Central Bank Executive Board member Lorenzo Bini Smaghi said today that allowing a euro-area member state to default or restructure its debt would be “wrong.”
The International Monetary Fund will arrange an 80 billion- euro to 100 billion-euro aid package to replace Greece’s existing bailout program, Kathimerini reported, without saying how it got the information.
Imperial Tobacco Group Plc (IMT) rose 3.1 percent to 2,224 pence after the company said it will buy back 500 million pounds ($816.5 million) of shares a year. Europe’s second-biggest tobacco company said first-half adjusted operating profit climbed to 1.48 billion pounds. Analysts had estimated profit of 1.49 billion pounds on that basis.
Accor SA (AC) surged 3.2 percent to 30.05 euros after Cheuvreux SA upgraded the shares to “outperform” from “underperform.”
Danske Bank, BG
Danske Bank A/S retreated 4.5 percent to 111.70 kroner after posting first-quarter net income of 709 million kroner ($136.5 million), missing the average estimate of 13 analysts for profit of 858 million kroner. Danske reported net income of 769 million kroner in the first quarter of 2010.
BG Group Plc (BG/) slid 1.6 percent to 1,412.5 pence as the U.K.’s third-biggest natural-gas producer said earnings declined 38 percent because of higher North Sea taxes and charges related to asset sales and long-term contracts.
JCDecaux SA (DEC) added 1.1 percent to 23.41 euros. The world’s second-largest seller of outdoor advertising posted first- quarter revenue of 535.3 million euros, compared with 487.2 million euros a year earlier.
Intercell AG (ICLL) rose 2.9 percent to 6.13 euros after the Austrian biotechnology company cut its first quarter net loss by 23.4 percent to 11.3 million euros.
TUI Travel Plc (TT/) gained 1.8 percent to 248 pence as Europe’s largest tour operator said it’s “well placed” to meet full- year targets after its fiscal first-half loss narrowed and sales rose.
Carmakers were among the best performers of the 19 industry groups in the Stoxx 600. Renault SA (RNO) climbed 1.4 percent to 40.84 euros. Bayerische Motoren Werke AG (BMW) gained 2.3 percent to 62.67 euros.
Mobistar SA (MOBB) soared 3.9 percent to 51.60 euros after Reuters reported that Blackstone Group LP and KKR & Co. may be considering an offer for France Telecom SA’s majority stake in Belgium’s second-biggest mobile-phone company. France Telecom is not aware of such an offer, Tom Wright, a company spokesman, said by phone.
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