European Stocks Advance as Greek Leaders Agree on Austerity; Daimler Gains
European stocks rose for the first time in four days as Greek political leaders reached a consensus on austerity measures and the European Central Bank held its benchmark interest rate at a record low.
Daimler AG (DAI), the maker of Mercedes-Benz cars, jumped to the highest in six months after reporting a 39 percent increase in quarterly profit. Hugo Boss AG (BOS) climbed as fourth-quarter operating income beat estimates. Credit Suisse Group AG (CSGN) fell 3.5 percent after posting an unexpected loss.
The Stoxx Europe 600 Index advanced 0.2 percent to 263.64 at the close in London. The benchmark measure has rallied 23 percent from last year’s low and 7.8 percent this year on mounting optimism that euro-area policy makers will contain the region’s debt crisis.
“We’ve seen a bit more confidence creeping into the markets,” Justin Urquhart Stewart, who helps oversee about $3 billion at 7 Investment Management in London, said in a Bloomberg Television interview. “We are seeing shafts of light in the leaden sky coming through in the euro zone.”
Greece’s government has reached a deal on austerity measures required for a 130 billion-euro ($173 billion) financing package, according to a statement from the press office of Prime Minister Lucas Papademos.
Euro-area finance ministers meeting in Brussels today will hear from Greece as well as the European Commission, the European Central Bank and the International Monetary Fund on whether Greece has met the conditions for a second bailout, Dutch Finance Minister Jan Kees de Jager said.
ECB, BOE Decisions
ECB (EURR002W) policy makers meeting in Frankfurt left the benchmark interest rate at a record low of 1 percent, as predicted by 55 of 57 economists in a Bloomberg News survey. President Mario Draghi said at a press conference that surveys confirm tentative signs of stabilization in the euro-area economy.
Bank of England officials decided to infuse another 50 billion pounds ($79 billion) into the U.K. economy to protect a nascent recovery. The Monetary Policy Committee raised the target for bond purchases to 325 billion pounds, more than a quarter of current outstanding gilts.
The number of Americans filing first-time claims for unemployment insurance payments unexpectedly declined in the week ended Feb. 4, a report today showed, indicating the U.S. labor market recovery is gaining traction.
National benchmark indexes rose in 12 of the 18 western European markets. France’s CAC 40 added 0.4 percent. Germany’s DAX climbed 0.6 percent, and the U.K.’s FTSE 100 gained 0.3 percent.
Of the 114 Stoxx 600 companies that have reported quarterly earnings since Jan. 9, 57 missed analysts’ estimates, compared with 52 that beat projections, according to data compiled by Bloomberg.
“Figures aren’t that bad,” Stewart said. “Companies are honest about write-offs and this is logical.”
Daimler (DAI) jumped 4.6 percent to 46.68 euros, its highest since Aug. 2. The company reported a 39 percent increase in fourth-quarter profit, boosted by demand for the revamped M- Class sport-utility vehicle. Earnings before interest and taxes rose to 2.18 billion euros, exceeding the 2.17 billion-euro average estimate of 12 analysts surveyed by Bloomberg.
A gauge of automakers rose 2.9 percent, for the biggest gain among the 19 industry groups in the Stoxx 600.
Hugo Boss, Arkema
Preference shares of Hugo Boss rose 0.7 percent to 77.30 euros. The German luxury clothier controlled by buyout firm Permira Advisers said earnings before interest, taxes, depreciation, amortization and one-time items increased to 97 million euros from 77 million euros in the year-earlier period. That beat the 86.4 million-euro average estimate of eight analysts.
Arkema (AKE) rose 4.3 percent to 67.63 euros. The chemical maker was raised to “overweight” from “equal weight” at Morgan Stanley.
KBC Groep NV (KBC) advanced 8.2 percent to 18.07 euros. Belgium’s biggest bank and insurer by market value plans further repayment of state aid this year. KBC said it’s making “considerable progress” with the planned sale of Kredyt Bank SA.
DNB ASA (DNB) rallied 8.3 percent to 69.45 kroner. The Nordic region’s second-largest bank reported a fourth-quarter profit that dropped less than analysts estimated. Net income fell to 4.09 billion kroner from 5.35 billion kroner a year earlier, surpassing the 3.57 billion-krone average estimate of 12 analysts surveyed by Bloomberg.
Danske Bank, Credit Suisse
Danske Bank A/S (DANSKE) added 5 percent to 89.25 kroner. Denmark’s biggest lender reported declining costs relative to income and after it boosted its capital buffer. The bank’s cost-to-income ratio fell to 54.4 percent in the fourth quarter, versus 59.3 percent a year earlier, the bank said.
Credit Suisse declined 3.5 percent to 24.35 Swiss francs. Switzerland’s second-biggest lender said it had a loss in the fourth quarter for the first time since 2008, hurt by “adverse markets” and costs to reorganize the investment bank.
The net loss amounted to 637 million francs ($698 million). That was wider than the 446 million-franc mean profit estimate of nine analysts.
ING Groep NV tumbled 5.4 percent to 6.87 euros. The biggest Dutch financial-services company posted a fourth-quarter profit that missed forecasts after reporting a hedging loss and taking a charge on its U.S. insurance business.
GDF Suez, Nobel Biocare
GDF Suez SA (GSZ) lost 4.8 percent to 20.30 euros. The operator of Europe’s biggest natural-gas network reported a 13 percent drop in full-year net profit after mild weather and a regulated rate freeze in France crimped earnings.
Nobel Biocare Holding AG (NOBN) tumbled 16 percent to 10.50 francs, for the worst performance on the Stoxx 600. The world’s second-biggest dental implant maker reported an increase in fourth-quarter profit as demand improved, driven by North America. Net income rose to 13.3 million euros from 5.2 million euros a year earlier. The earnings missed the average estimate of 18.1 million euros from eight analysts.
Orkla ASA (ORK) retreated 4.3 percent to 45.50 kroner. The Norwegian company that is selling assets to focus on consumer brands reported lower-than-estimated candy and cookie sales at the end of 2011. The company said operating profit at its brands unit fell 4 percent to 876 million kroner ($153 million).
To contact the reporter on this story: Adria Cimino in Paris at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com