European stocks climbed, extending a near five-year high for the region’s benchmark gauge, as financial companies from HSBC Holdings Plc (HSBA) to Allianz SE reported results that topped analysts’ estimates.
HSBC, Europe’s biggest bank, Societe Generale SA (GLE), France’s second-largest lender, and Germany’s Commerzbank AG each climbed at least 2.6 percent after posting results. Allianz gained 3.6 percent after Europe’s largest insurer reported a jump in profit. Alstom SA (ALO) sank 12 percent after the power-equipment maker cut its profit forecast.
The Stoxx Europe 600 Index (SXXP) rose 0.3 percent to 301.74 at the close of trading. The gauge has climbed 7.9 percent this year to its highest level since June 2008 as central banks maintained stimulus measures. The volume of shares changing hands in Stoxx 600 companies was 16 percent greater than the average of the last 30 days, data compiled by Bloomberg show.
“I am overweight financials,” said Kevin Lilley, a fund manager at Old Mutual Asset Managers U.K. in London, which oversees about $6.1 billion. “It’s been a mixed bag on the earnings front, but surprises are coming through on the financials. I see the market continuing to grind higher.”
National benchmark indexes climbed in 16 out of 18 western European markets today. France’s CAC 40 added 0.4 percent, Germany’s DAX increased 0.9 percent and the U.K.’s FTSE 100 gained 0.6 percent.
HSBC (HSBA) rose 3 percent to 735 pence after saying first-quarter pretax profit almost doubled to $8.43 billion, as bad debts declined and it cut costs. That beat the $8.04 billion average estimate of nine analysts surveyed by Bloomberg.
Societe Generale (GLE) increased 5.7 percent to 30.14 euros after it said first-quarter profit fell 50 percent to 364 million euros ($476 million), hurt by accounting charges related to its debt. That still beat the 317 million-euro average estimate of 10 analysts surveyed by Bloomberg.
Commerzbank (CBK) added 2.6 percent to 11.09 euros. Germany’s second-largest lender reported a first-quarter loss of 94 million euros after booking costs associated with firing staff, compared with a profit of 355 million euros a year earlier. That still beat the average loss estimate of 153.7 million euros of seven analysts surveyed by Bloomberg.
Allianz (ALV) gained 3.6 percent to 120.70 euros after reporting a 24 percent rise in first-quarter profit to about 1.7 billion euros after results improved at all of its businesses. Operating profit of 2.8 billion euros also topped analysts’ estimates.
Hochtief AG (HOT) advanced 5.9 percent to 56.51 euros. Germany’s largest construction company agreed to sell its airports division to Public Sector Pension Investment Board of Canada for about 1.5 billion euros as it streamlines its business to focus on more profitable units.
Hochtief also today forecast full-year pretax profit of between 600 million and 680 million euros after reporting first- quarter pretax profit of 123 million euros. That beat the average estimate of three analysts in a Bloomberg news survey.
ACS Actividades de Construccion & Servicios SA, which owns a majority stake in the German company, climbed 8.5 percent to 21.56 euros in Madrid.
Lafarge SA (LG) rose 4.4 percent to 51.04 euros. The world’s biggest cement maker reiterated its full-year forecast as cold weather, stinted Algerian and Egyptian production and fewer working days constricted first-quarter sales.
Chief Executive Officer Bruno Lafont said in a statement the first quarter traditionally represents a small proportion of income and isn’t indicative of full-year trends. “Our outlook remains unchanged and we expect to see cement demand growth in our markets of between 1 percent and 4 percent in 2013.”
Alstom (ALO) slid 12 percent to 28.40 euros, its biggest drop since October 2008. The world’s third-largest power-equipment maker cut its profit forecast after full-year earnings missed analysts’ estimates amid reduced spending by clients.
It predicted its operating margin will stay stable in 2013 and 2014 and then gradually increase over the next two to three years to around 8 percent. The company had initially said the margin would rise to about 8 percent by 2015.
Prudential Plc (PRU) dropped 0.9 percent to 1,145 pence, after earlier losing as much as 3.2 percent. The shares fell even as the U.K.’s biggest insurer by market value reported first- quarter revenue of 1.04 billion pounds, beating analysts’ estimates.
G4S Plc (GFS) sank 15 percent to 260 pence. The security company reported a lower operating margin for the first quarter, citing challenging economic and trading conditions in continental Europe. It expects the margin trend to continue for the full year.
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