European Stocks Gain on ECB Bank Loans, U.S. Confidence; Veolia, C&W Surge

European (UKX) stocks climbed this past week as the European Central Bank lent to the region’s banks and consumer confidence and jobless claims in the U.S. added to optimism that the world’s largest economy continues to recover.

Veolia Environnement SA, the world’s biggest water utility, jumped 22 percent after saying it’s in exclusive talks to sell its Transdev mass-transit unit. Cable & Wireless Worldwide Plc soared 20 percent as Tata Communications Ltd. said it may make a cash offer for the company.

The Stoxx Europe 600 Index advanced 0.9 percent this past week to 267.21. The benchmark measure climbed 3.9 percent last month and rose 8.1 percent from the beginning of the year through the end of last month. That was the biggest January- February increase since 1998 as investors speculated that the euro area will contain its sovereign-debt crisis and as U.S. economic reports beat estimates.

“The global backdrop is improving with the ECB’s action coming in the context of a wide range of easing moves from other central banks around the world,” said Trevor Greetham, the head of asset allocation at Fidelity Worldwide Investment which manages 135.3 billion pounds ($214.5 billion). “There are increasing signs that stimulus is starting to take effect and a U.S.-led upswing in global growth is underway.”

Euro-area finance ministers this week authorized the region’s bailout fund to issue bonds for Greece’s debt restructuring, the first step toward the Mediterranean nation drawing funds from its 130 billion-euro rescue package.

“We saw today that Greece has made a lot of effort and has made a lot of progress,” Germany’s Finance Minister, Wolfgang Schaeuble, told reporters after the meeting on March 1. “We were able to make a fundamentally positive decision.”

U.S. Consumer Confidence

Confidence (CONCCONF) among U.S. consumers rose in February to the highest level in a year, showing households may sustain spending and drive the economy. Initial jobless claims fell last week to a level matching a four-year low, a Labor Department report showed.

Utilities posted the largest gains among the 19 industry groups in the Stoxx 600 (SXXP) as Veolia and Suez Environnement rallied. Technology shares posted the biggest weekly decline.

Veolia soared 22 percent, its biggest weekly rally since 2002. Veolia has held exclusive talks with an unidentified investor for the sale of Transdev, the mass-transit unit it owns with Caisse des Depots et Consignations, Chief Executive Officer Antoine Frerot said on March 1. Les Echos reported on March 2 that the utility has held talks with Natixis SA’s Cube Infrastructure Fund. The French newspaper did not say where it got the information.

Cable & Wireless Worldwide

Cable & Wireless Worldwide rallied 20 percent as Tata said it may compete with Vodafone Group Plc to acquire the owner of the U.K.’s largest business fiber network. Mumbai-based Tata said it will decide whether to make an offer by March 29. Vodafone, which said last month it was evaluating a bid, has until March 12 to announce whether it will make a formal offer for London-based Cable & Wireless.

ITV Plc climbed 9.2 percent as the U.K.’s biggest terrestrial commercial broadcaster reported 2011 profit that beat analysts’ estimates after expanding services that rely less on advertising.

SBM Offshore NV (SBMO), the world’s biggest supplier of floating oil and gas platforms, rose 15 percent on the company’s order portfolio growth and sales forecast for 2012.

Vivendi SA (VIV) tumbled 13 percent after predicting that its profit will slump through 2013 as its SFR unit competes with Iliad SA, France’s new mobile-phone operator.

Essar Energy Plc (ESSR), an Indian power producer and oil refiner traded in London, slumped 9.7 percent after posting a loss of $568.2 million in 2011, compared with a profit of $248.3 million in 2010. The Supreme Court of India ruled in January that the energy producer’s Essar Oil unit pay 63 billion rupees ($1.3 billion) in sales tax, overturning a judgment from a lower court that had allowed it to defer the levy.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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

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