European Stocks Climb on Greek Aid Speculation; Alpha Bank Jumps

European stocks climbed after the euro rallied to a three-week high as investors speculated that European officials will sanction additional financial assistance for Greece.

Alpha Bank SA and EFG Eurobank Ergasias SA (EUROB) led a rally in Greek banks, climbing more than 8 percent in Athens trading. Vestas Wind Systems A/S led alternative-energy stocks higher for a second day. Steelmakers also advanced after Voestalpine AG (VOE) posted higher full-year profit. Nokia Oyj (NOK1V) plunged 18 percent after the company cut its second-quarter and its full-year outlook for devices and services.

The Stoxx Europe 600 Index rose 0.8 percent to 281.06 at the 4:30 p.m. close in London, paring this month’s loss to 1 percent. The gauge had fallen for four straight weeks amid speculation that Greece will restructure its debt. Since reaching this year’s high on Feb. 17, the Stoxx 600 has retreated 3.5 percent.

“We have gone through a period in which a lot more pessimism surrounding this topic has come into the market and we are seeing something of a rebound off the back of that,” said Valentijn Van Nieuwenhuijzen, head of strategy at ING Investment Management, in a Bloomberg Television interview. “The likelihood of an explosion of the Greek situation over the next couple of months seems to have come down.”

The euro rallied against the dollar after Luxembourg Prime Minister Jean-Claude Juncker said European leaders will decide on a new aid package for Greece by the end of next month, while also ruling out a “total restructuring” of the nation’s debt. Junker spoke yesterday in Paris.

Inspectors from the European Union, the International Monetary Fund and the European Central Bank plan to conclude their review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($158 billion) bailout in the coming days. The EU will then formulate its plan for additional aid.

German Demands

The Wall Street Journal said Germany may stop demanding that Greece reschedules its bonds so that the Mediterranean nation can get a new package of loans. The newspaper cited unidentified people.

National benchmark indexes advanced in all but 3 of the 18 western European markets today. France’s CAC 40 Index (CAC) climbed 1.6 percent and Germany’s DAX Index jumped 1.9 percent, while the U.K.’s FTSE 100 Index gained 0.9 percent. Greece’s ASE Index soared 5.6 percent, its largest gain in a year.

German Retail Sales

In Europe, German retail sales rose in April as unemployment fell below 3 million for the first time in almost 19 years. Separate figures from the European Union’s statistic office showed that inflation in the euro area slowed in May to 2.7 percent from 2.8 percent in April while in Denmark, the economy unexpectedly contracted for a second quarter, joining Portugal, which received a bailout in May, in recession.

Alpha Bank, Greece’s third-biggest lender, rallied 8.6 percent to 3.16 euros in Athens, while Eurobank, the country’s second-largest bank, surged 11 percent to 3.18 euros. Both stocks tumbled more than 6 percent yesterday as the IMF reviewed Greece’s efforts toward meeting fiscal targets.

Standard Chartered Plc (STAN) rose 1.4 percent to 1,628 pence after Nomura Holdings Inc. raised its recommendation for the U.K. bank that makes the majority of its profit in Asia to “buy” from “neutral,” saying the firm remains “well positioned’ for the long term.

Analysts also raised their price estimate for the shares to 1,800 pence from 1,770 pence. The revised projection is 12 percent higher than last week’s closing price.

Vestas, Solarworld, Q-Cells

Vestas soared 3.4 percent to 156.20 kroner in Copenhagen, while Germany’s Q-Cells SE (QCE) surged 7.9 percent to 2.07 euros.

Alternative energy stocks rallied for a second day after German Chancellor Angela Merkel’s coalition yesterday set 2022 as the final date to close the country nuclear reactors, making Germany the largest nation to abandon atomic power.

Voestalpine advanced 4.4 percent to 34.78 euros after Austria’s largest steelmaker said fiscal full-year profit rose almost fivefold to 512.7 million euros as the global economy improved.

‘‘Further positive economic development in the second half of calendar year 2011 can be expected,” the company said. “Against this backdrop a further significant improvement of Voestalpine results should be possible in 2011/12.”

Kloeckner & Co. SE, the German steel trader operating in 15 countries in Europe and North America, gained 2.5 percent to 20.60 euros and ArcelorMittal (MT), the world’s largest steelmaker, rose 1.2 percent to 23.18 euros. Salzgitter AG (SZG), Germany’s second-biggest steelmaker, jumped 2.6 percent to 51.35 euros.

Nokia, Barratt Developments

Nokia tumbled 18 percent to 4.75 euros, its lowest price since 1998, after the Finnish mobile-phone maker forecast that devices and services net sales in 2011 will miss its previous projection of 6.1 billion euros to 6.6 billion euros.

Barratt Developments Plc (BDEV), the U.K.’s biggest homebuilder by volume, climbed 0.8 percent to 113.4 pence after the Centre for Economics & Business Research forecast that U.K. house prices will rise 16 percent over the next four years after slipping 1.4 percent in 2011.

Wolseley Plc (WOS) jumped 3.4 percent to 2,058 pence after the Sunday Times reported that the supplier of heating and plumbing products will sell three of its U.K. businesses for 300 million pounds ($493 million). The newspaper did not say where it got the information.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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