European Stocks Climb; BP Gains, Pandora Slumps, Glencore Debuts in London
Stock Chart for BP PLC (BP/)
Glencore International Plc was unchanged on its first day of trading in London after it sold $10 billion of stock in its initial public offering. BP Plc (BP/) climbed 1.6 percent as BofA Merrill Lynch Global Research advised buying the shares. Pandora A/S, the Danish maker of jewelry, slumped 22 percent after saying it has lifted prices globally for the first time in its history because of the rising cost of silver and gold.
The Stoxx Europe 600 Index gained 0.7 percent to 280 at the 4:30 p.m. close in London. The gauge has still fallen 3.8 percent from this year’s high on Feb. 17 as a selloff in commodities and concern that Europe’s sovereign-debt crisis will derail the economic recovery overshadowed company profits and government stimulus measures.
“The last 24 hours have certainly seen the ‘risk on’ switch flicked,” said Ben Potter, a market strategist at IG Markets Ltd. in Melbourne. “For the first time in a long while, participants are starting to talk about strong demand fundamentals for commodities, which is an encouraging sign. It feels like sentiment has definitely improved; people seem to be talking about the driving forces in a much more positive light.”
National benchmark indexes climbed in 16 of the 18 western European markets. The U.K.’s FTSE 100 Index gained 0.6 percent, while Germany’s DAX Index rallied 0.8 percent. France’s CAC 40 Index rose 1.3 percent.
Minutes of the Fed’s April policy meeting said that talks about an exit strategy from record stimulus measures don’t mean monetary tightening “would necessarily begin soon.”
Fed Bank of St. Louis President James Bullard said in an interview in New York that the central bank may keep its monetary policy unchanged until late this year, and that declining inflation expectations have curbed the need to begin withdrawing record stimulus.
A report showed fewer Americans than forecast filed applications for unemployment benefits last week. Jobless claims declined by 29,000 to 409,000 in the week ended May 14, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey was for a drop to 420,000.
Stocks pared earlier gains as sales of existing U.S. homes unexpectedly declined in April, indicating that the industry is struggling to gain traction as the economy expands. Purchases of previously owned homes dropped 0.8 percent to a 5.05 million annual pace last month, the National Association of Realtors said today in Washington. A 5.2 million rate was the median projection in a Bloomberg News survey.
Global per-share earnings will rise 18 percent this year, faster than an earlier forecast, amid stronger revenue growth and sustained margins, according to Citigroup Inc.
Earnings per share, or EPS, are estimated to increase 11 percent in 2012 and 9 percent in 2013, analysts led by Robert Buckland, Citigroup’s chief global strategist, wrote in a report yesterday. The brokerage had predicted in September earnings- per-share growth of 12 percent this year.
Dominique Strauss-Kahn, once considered a leading contender to win the French presidency next year, resigned as head of the International Monetary Fund after being charged with the attempted rape of a New York hotel maid. He denied charges that he attacked a 32-year-old woman at a Sofitel hotel in midtown Manhattan on May 14.
Glencore, the world’s largest commodities trader, priced its shares at 530 pence apiece in an initial public offering, the company said. The shares were unchanged at 530 pence, erasing gains of as much as 3.8 percent.
BP gained 1.6 percent to 447.9 pence as BofA Merrill Lynch said the shares may rally 31 percent with a price estimate of 680 pence.
ITV Plc (ITV) jumped 4 percent to 69.7 pence as Sanford C. Bernstein & Co. raised its recommendation on the shares to “outperform” from “market perform,” saying it expects a strong second half to be driven by ITV’s exclusive rights to the Rugby World Cup.
Pandora slumped 22 percent to 199 kroner for the biggest decline on the Stoxx 600 index.
Invensys Plc (ISYS) slid 3.1 percent to 299.8 pence. Its shares may be removed from the FTSE 100 Index following the initial public offering of Glencore today, which is likely to be included at its expense, according to a report from John Carson, a London-based quantitative analyst at Societe Generale SA. The shares fell even as full-year operating profit of 262 million pounds ($423.8 million) topped the average analyst estimate compiled by Bloomberg of 248 million pounds.
Cie. Financiere Richemont SA fell 1.5 percent to 55.15 Swiss francs after reporting full-year net income that missed estimates as restructuring at a watch business crimped profitability.
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