European Stocks Rise for Fifth Day; Nestle Gains
European stocks climbed for a fifth day as Nestle SA (NESN) posted sales growth that beat estimates and a report showed China’s inflation cooled, increasing speculation that policy makers will do more to stimulate the economy.
Nestle, which accounts for more than 3 percent of the Stoxx Europe 600 Index (SXXP), advanced 2.4 percent as higher prices helped to increase revenue. Novo Nordisk (NOVOB) A/S gained 1.3 percent after the company raised its full-year sales and profit forecasts. Deutsche Telekom AG (DTE) slid 2 percent after saying it has lost more customers in the U.S. than analysts had forecast.
The Stoxx 600 increased 0.4 percent to 270.26 at the close, its highest level since March 19. The equity benchmark has rallied 16 percent since its 2012 low on June 4, with nine straight weeks of gains, as policy makers eased repayment terms for Spanish lenders and optimism grew that central banks will add more stimulus.
“If the figures show mild inflation and economic growth slows down as they have recently, there’s a strong chance that China will add stimulus,” said Pierre Mouton, a fund manager who helps oversee $6.5 billion at Notz Stucki & Cie. in Geneva. “On earnings, Nestle’s reported a very good set of results. It helps the sector as a whole.”
The volume of shares changing hands on the Stoxx 600 was 23 percent lower than the average of the last 30 days, according to data compiled by Bloomberg. The volume of securities trading on Germany’s DAX Index was 12 percent higher than the average.
China’s consumer prices rose 1.8 percent from a year earlier, the National Bureau of Statistics said in Beijing. That compared with the 1.7 percent median forecast of 33 economists in a Bloomberg News survey and a 2.2 percent gain in June.
The leaders of the ruling Communist Party last week pledged to keep adjusting policies to ensure the economy expands at a stable rate this year.
National benchmark indexes gained in 15 of the 18 western- European markets. The U.K.’s FTSE 100 Index rose 0.1 percent, while Germany’s DAX slipped less than 0.1 percent. France’s CAC 40 Index added 0.5 percent.
Nestle climbed 2.4 percent to 61.05 Swiss francs after the world’s largest food company said sales increased 6.6 percent, excluding acquisitions, divestments and currency shifts in the first half of the year. That beat the average estimate of 10 analysts in a Bloomberg survey for growth of 6.3 percent.
Of the 261 companies listed on the Stoxx 600 that have reported half-yearly profit this earnings season, 155 have exceeded analysts’ projections, while 101 have missed them, according to data compiled by Bloomberg.
Novo Nordisk advanced 1.3 percent to 938 kroner after the world’s largest insulin maker said 2012 revenue will jump 9 percent to 12 percent in local currencies, compared with a previous forecast for an increase of 8 percent to 11 percent. Operating profit in local currencies will climb 15 percent, more than the previous prediction of 10 percent.
Standard Chartered Plc (STAN) added 3.6 percent to 1,363 pence as Chief Executive Officer Peter Sands said yesterday that a New York regulator had no grounds for revoking the lender’s license. The Department of Financial Services said that Standard Chartered had processed $250 billion of transactions with Iranian banks that were subject to sanctions.
“We reject the position and portrayal of facts by the department,” Sands said on a conference call with reporters in his first public comments since the regulator’s report on Aug. 6. “It would be disproportionate and wholly inconsistent with the actions of other U.S. authorities in other sanctions matters” to revoke the bank’s New York license, he said.
Bankia SA (BKIA), the lender Spain nationalized in May, surged 19 percent to 1.51 euros for the largest gain on the Stoxx 600. The shares have more than doubled in price since European Central Bank President Mario Draghi pledged on July 26 to do whatever it takes to preserve the euro.
Nokia Oyj (NOK1V), the smartphone maker that started using Microsoft Corp.’s operating system to revive its business, jumped 6.5 percent to 2.28 euros after agreeing to sell its Qt app-tools unit to Digia Oyj.
Deutsche Telekom fell 2 percent to 9.21 euros after Germany’s largest phone company said T-Mobile USA lost 557,000 contract customers in the second quarter, more than the 346,200 predicted by analysts.
Commerzbank AG (CBK) declined 4.2 percent to 1.23 euros after projecting that net income in the second half of 2012 will fall below profit in the first half of the year. Germany’s second- largest lender also reported second-quarter net income that rose to 275 million euros from 24 million euros a year earlier. That topped the average analyst estimate of 270 million euros in a Bloomberg survey.
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