European stocks rose, after their first weekly gain since May 17, as euro-area factory output in June contracted less than estimated and Japanese manufacturers turned optimistic for the first time since September 2011.
Nokia Oyj rallied 3.7 percent after the Finnish phonemaker agreed to buy Siemens AG’s stake in their joint venture. Siemens, Europe’s largest maker of power equipment, increased 2.6 percent. PSA Peugeot Citroen fell 2.5 percent after French car registrations declined in June.
The Stoxx Europe 600 Index added 1.2 percent to 288.29 at the close of trading. The benchmark advanced 1.7 percent last week as China took steps to ease a cash crunch. It still lost 5.3 percent in June after Federal Reserve Chairman Ben S. Bernanke said the central bank could taper stimulus measures if the U.S. economy improves sustainably.
“We’ve had quite a weak month in June, so people may be prepared to look more positively,” said Andrea Williams, who helps oversee $76 billion as head of European equities at Royal London Asset Management. “Investors may be a bit more aggressive on the cyclicals. Japan’s manufacturing report helps, with the economic conditions improving because of the actions that have been taken.”
A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, London-based Markit Economics said today. That’s above an initial estimate of 48.7 on June 20. The gauge has been below 50, indicating contraction, since July 2011.
In Japan, a central bank report showed the quarterly Tankan index (JNTSMFG) for large manufacturers rose to plus 4 in June from minus 8 in March. The first positive figure since September 2011 signaled that optimists outnumber pessimists. The median estimate of economists surveyed by Bloomberg was for 3.
In the U.S., a report showed that factory output in the world’s largest economy increased in June. The Institute for Supply Management’s manufacturing index rose to 50.9 from 49 the prior month. Economists in a Bloomberg survey had forecast an increase to 50.5.
National benchmark indexes advanced in all of the western European markets except Iceland. France’s CAC 40 added 0.8 percent, while Germany’s DAX increased 0.3 percent. The U.K.’s FTSE 100 rallied 1.5 percent, the most since May 28.
In China, an official purchasing managers’ index of factory output dropped to 50.1, the lowest level in four months, from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. A private PMI from HSBC Holdings and Markit was 48.2, the weakest since September. Readings above 50 signal expansion.
Nokia Oyj (NOK1V) jumped 3.7 percent to 2.95 euros after saying it will buy Siemens’ 50 percent holding in Nokia Siemens Networks for 1.7 billion euros ($2.2 billion). Siemens gained 2.6 percent to 79.63 euros, its biggest gain since August 2012, after the companies agreed to end their six-year long telecommunications-equipment joint venture.
Hennes & Mauritz AB (HMB) added 4 percent to 229.30 kronor after Bank of America Corp. raised its recommendation on the shares to buy from neutral, citing an improved outlook for the retailer’s online business.
A gauge of travel and leisure companies performed the best of the 19 industry groups in the Stoxx 600. Compass Group Plc climbed 2.7 percent to 863 pence, contributing the most to gains. Ryanair Holdings Plc, Europe’s biggest discount airline, increased 3.9 percent to 7.38 euros in Dublin, its highest price since at least May 1997.
Hunting Plc (HTG) rallied 9 percent to 798 pence, its biggest gain since August 2011, after the U.K. oil-services provider said first-half results will meet analysts’ estimates and that its outlook remains positive for the rest of the year.
Peugeot fell 2.5 percent to 6.17 euros after data showed the carmaker’s registrations in France fell 9.5 percent to 57,962 in June.
RWE AG slid 5.2 percent to 23.25 euros, the lowest price since September 2011, as it said winning cash back from OAO Gazprom after a court ruling last week will not affect its 2013 earnings targets. Der Spiegel magazine had reported earlier today that Gazprom may pay Germany’s second-largest utility 1 billion euros on gas contracts covering a three-year period.
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