European Stocks Climb as U.K. Manufacturing Tops Forecast

European stocks rose for the first time in a week as manufacturing in U.K. and Italy unexpectedly gained and euro-area finance ministers agreed on steps to support Spanish banks.

ASML Holding NV (ASML) rallied the most since 2008 as Intel Corp. (INTC) agreed to invest as much as $4.1 billion in the maker of semiconductor equipment. Barclays Plc (BARC) added 2.2 percent after Chairman Marcus Agius said the bank’s former chief executive officer will forgo bonuses. Ipsen SA plunged 11 percent after U.S. regulators put two of its clinical trials on hold.

The Stoxx Europe 600 Index (SXXP) climbed 0.8 percent to 255.6 at the close of trading. The benchmark gauge is entering a sixth straight week of gains, which would be the longest winning streak since April 2010, as the region’s policy makers eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.

“The data out of both Italy and U.K. have been better than expected,” said Markus Huber, head of German sales trading at ETX Capital in London. “The market has been starved of any kind of good news, so this is welcome.”

U.K. factory output rose 1.2 percent in May from the previous month, the Office for National Statistics said today in London. The median forecast of 26 economists in a Bloomberg survey was for a decline of 0.1 percent. Overall industrial output increased 1 percent.

Italian Production

In Italy, industrial production gained 0.8 percent in May from a month earlier, the national statistics office Istat said. Economists had forecast a decline of 0.6 percent, according to the median estimate in a Bloomberg survey.

European governments agreed to lend 30 billion euros ($37 billion) to Spain by the end of July, with the aim of eventually using the euro-area bailout fund to recapitalize banks directly, instead of burdening the Spanish government with the debts, Luxembourg Prime Minister Jean-Claude Juncker said.

The initial cash will “be mobilized as a contingency in case of urgent needs in the Spanish banking sector,” Juncker told reporters early today in Brussels after chairing a nine- hour meeting of euro-region finance ministers. The program “will succeed in addressing the remaining weakness in the Spanish banking sector.”

National benchmark indexes gained in all of the western European markets, except Greece and Iceland. Germany’s DAX Index advanced 0.8 percent, France’s CAC 40 added 0.6 percent and the U.K.’s FTSE 100 rose 0.7 percent.

China Imports

China’s imports rose less than expected in June, pushing the trade surplus to a three-year high and adding pressure on the government to boost economic stimulus. Inbound shipments increased 6.3 percent from a year earlier, the customs bureau said, compared with the 11 percent median estimate in a Bloomberg survey of 32 economists. Export growth slowed to 11.3 percent and the trade surplus rose to $31.7 billion.

In the U.S., Alcoa Inc. (AA) began the second-quarter earnings season yesterday. The nation’s largest aluminum producer said profit excluding charges related to a proposed settlement of Aluminium Bahrain BSC’s bribery lawsuit and other items was 6 cents a share, compared with the 5-cent average of 19 estimates compiled by Bloomberg.

ASML jumped 8.6 percent to 43.15 euros, the biggest gain since September 2008. Intel said it will take an initial 10 percent stake in the Dutch company for about $2.1 billion, and later another 5 percent for about $1 billion. ASML will also get another $1 billion in stages, the world’s largest chipmaker said yesterday.

Barclays Gains

Barclays gained 2.2 percent to 167 pence. Agius said the bank’s former Chief Executive Officer Bob Diamond will forgo deferred bonuses valued at as much as 20 million pounds ($31 million) after politicians protested his role in the Libor- fixing scandal. Diamond will receive a total payoff of about 2 million pounds.

Logitech International SA (LOGN) surged 4.3 percent to 10.12 Swiss francs. The world’s biggest maker of computer mice said the board will ask shareholders to approve a one-time dividend, the first payment since 1996.

Marks & Spencer Group Plc (MKS) advanced 2.1 percent to 327.8 pence. The U.K.’s largest clothing retailer said its head of general merchandise Kate Bostock will step down after reporting the biggest decline in non-food revenue since 2008. Same-store sales of general merchandise slid 6.8 percent in the quarter ended June 30. The median estimate of analysts in a Bloomberg News survey called for a 6.5 percent decline.

Afren, Ipsen

Afren Plc (AFR) jumped 9.1 percent to 114.3 pence amid speculation it may get a takeover offer. Exxon Mobil Corp. and Eni SpA are examining possible bids for the oil and gas company, the U.K.’s Daily Mail said yesterday.

Ipsen (IPN) tumbled 11 percent to 17.70 euros after U.S. regulators put trials of a hemophilia drug it is developing with Inspiration Biopharmaceuticals Inc. on hold because of a “potential safety concern.”

Balfour Beatty Plc (BBY) declined 2.9 percent to 302 pence after the U.K. builder said 2012 full-year performance will be “in line with expectations.”

Sodexo (SW) slid 5 percent to 58.19 euros, the biggest drop since November 2009. The world’s second-biggest provider of catering services said sales growth slowed in the third quarter because of worsening economic conditions.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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