European Stocks Climb as BP, Deutsche Bank Top Estimates
European stocks rose the most in two weeks as companies from BP Plc (BP/) to Deutsche Bank AG (DBK) reported earnings that topped estimates and U.S. house prices climbed. Hurricane Sandy closed New York markets for a second day.
BP, Europe’s second-biggest oil company, and Deutsche Bank, Germany’s largest lender, advanced more than 4 percent. UBS (UBSN) AG, Switzerland’s biggest bank, jumped to a 15-month high after raising a profitability goal. Danske Bank (DANSKE) A/S tumbled 9.4 percent on plans to sell new shares.
The Stoxx Europe 600 Index (SXXP) advanced 0.9 percent to 271.76 at the close of trading, extending this month’s gain to 1.2 percent. The gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.
“Once again, we’re seeing good resilience of European companies,” said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris. “Expectations were so negative that there haven’t been many bad surprises.”
Per-share profit has topped analysts’ forecasts at 53 percent of the Stoxx 600 companies that have reported results since Oct. 9, according to data compiled by Bloomberg.
The S&P/Case-Shiller index of property values in 20 U.S. cities rose 2 percent in August from a year earlier, the biggest gain since July 2010, after rising 1.2 percent in July. The median forecast of 25 economists in a Bloomberg survey projected a 1.9 percent gain.
Standard & Poor’s 500 Index futures gained 0.2 percent from the Oct. 26 close to 1,411.1, having earlier fallen as much as 1 percent. Trading in the securities ended at 9:15 a.m. New York time again today as weather stopped U.S. equity trading for two straight days for the first time since 1888.
Sandy came ashore near Atlantic City, New Jersey, at about 8 p.m. New York time yesterday. The system is no longer a hurricane, because it’s drawing energy from temperature differences and not the ocean, making the transition to a superstorm that may push a wall of water ashore in the Northeast and lash the East with wind, rain and snow.
National benchmark indexes advanced in 15 of the 18 western-European markets. Germany’s DAX climbed 1.1 percent, the U.K.’s FTSE 100 gained 1 percent and France’s CAC 40 rallied 1.5 percent.
The number of shares changing hands in Stoxx 600 companies was 44 percent lower than the 30-day average, according to data compiled by Bloomberg. Volume on the Euro Stoxx 50 was 57 percent lower, the data showed.
Economic confidence in the euro area fell to the lowest in more than three years in October. An index of executive and consumer sentiment dropped to 84.5 from 85.2 in September, the European Commission said. Economists had forecast a decrease to 84.4, the median of 27 estimates in a Bloomberg survey showed.
A measure of oil and gas companies in the Stoxx 600 gained 1.8 percent for the biggest contribution to the equity benchmark’s advance today.
BP jumped 4.2 percent to 442.85 pence, the largest jump in 11 months. The company said third-quarter net income rose to $5.4 billion from $5 billion in the same period of 2011 and raised its dividend by 12.5 percent to 9 cents a share. Profit adjusted for one-time items and changes in inventory was $5.2 billion, compared with the average estimate of 11 analysts surveyed by Bloomberg of $4 billion.
Eni SpA (ENI) added 2.1 percent to 17.69 euros as Italy’s largest oil producer reported third-quarter adjusted net income from continuing operations of 1.78 billion euros ($2.3 billion). Analysts in a Bloomberg survey had forecast 1.56 billion euros.
Deutsche Bank increased 4.5 percent to 34.80 euros. The lender said third-quarter profit rose 3 percent after investment-banking revenue exceeded targets. Net income climbed to 747 million euros in the three months through September from 725 million euros a year earlier, the company said. That beat the 563.9 million-euro average estimate of seven analysts surveyed by Bloomberg.
UBS climbed 5.9 percent to 13.89 Swiss francs, its highest price since July 25, 2011. The bank said it plans to save about 3.4 billion francs ($3.7 billion) in additional annual costs by the end of 2015 as it reduces headcount by 10,000 to about 54,000. The company will target a return on equity of at least 15 percent starting in 2015, compared with a previous goal of 12 percent to 17 percent.
Erste Group Bank AG (EBS) advanced 6.3 percent to 19.07 euros in Vienna. Europe’s third-biggest lender said net income rose to 143.7 million euros in the three months through September, after a 1.5 billion-euro loss a year earlier. That matched the average estimate of 13 analysts surveyed by Bloomberg.
Telefonica Deutschland Holding AG gained 3.6 percent to 5.80 euros. The German unit of Spain’s largest phone company climbed in its Frankfurt trading debut after completing Europe’s biggest initial public offering this year. The German unit priced 258.8 million shares at 5.60 euros each, at the top of a range that was narrowed from 5.25 euros to 6.50 euros.
Nokian Renkaat Oyj (NRE1V) jumped 8.3 percent to 31.76 euros, its biggest increase in more than a year, as the Nordic region’s largest tiremaker said Russian demand remains healthy.
Danske Bank slumped 9.4 percent to 94 kroner, its biggest drop since February 2011. Denmark’s largest lender said it plans to sell 7 billion kroner ($1.2 billion) in new shares as part of an effort to achieve a core Tier 1 capital ratio in excess of 13 percent by the end of next year.
Third-quarter net income reached 1.31 billion kroner, compared with a loss of 384 million kroner a year earlier, the bank said. That was in line with the average 1.34 billion-krone estimate of 17 analysts surveyed by Bloomberg.
Swedish Match AB (SWMA), a maker of snuff, sank 9.6 percent to 234 kronor, its largest decline since at least 1996. The company reported third-quarter net income of 693 million kronor ($105 million), falling short of analyst estimates.
Geberit AG (GEBN) lost 5.6 percent to 192 francs. The Swiss maker of toilets and bathroom piping systems cut its revenue forecast and said it expects “cloudy conditions” for the rest of the year as sales dropped in Italy and at home.
Fiat SpA, the Italian carmaker that controls Chrysler Group LLC, slid 4.7 percent to 3.93 euros as the company cut its 2014 trading-profit goal to as much as 5.2 billion euros from 7.5 billion euros.
Greek banks fell as Prime Minister Antonis Samaras said talks on the 2013 budget have been completed. Democratic Left, one of the parties supporting Samaras’s coalition, said it disagrees with some labor measures.
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