European stocks rose for a fifth day, with the benchmark Stoxx Europe 600 Index advancing to a 12-week high, as a report showed the euro area’s economy emerged from a record-long recession in the second quarter.
Subsea 7 SA, an offshore oil services provider, surged the most in three years after reporting a smaller-than-expected quarterly loss. Rentokil Initial Plc (RTO) jumped to the highest price in more than two years after reporting an increase in first-half earnings and sales. RWE AG lost 4.5 percent after second-quarter net income missed analysts’ estimates.
The Stoxx 600 rose 0.3 percent to 308.62 at the close of trading. The gauge has rallied 12 percent since reaching a low on June 24 amid better-than-forecast economic data and as central banks signalled interest rates will remain low for an extended period.
“Europe is showing signs of life and is exiting recession earlier than many expected,” Witold Bahrke, a Copenhagen-based senior strategist at PFA Pension A/S, which manages about $55 billion, wrote in an e-mail. “More forward-looking indicators are pointing at further reacceleration in the coming quarters, which is very good news. It is essential for the euro zone to re-enter positive growth territory to get a more balanced risk picture heading into autumn with a lot of potential headwind.”
Gross domestic product in the 17-nation euro area expanded 0.3 percent in the April-June period after a 0.3 percent contraction in the previous three months, the European Union’s statistics office in Luxembourg said today. That exceeded the median estimate of 0.2 percent growth in a Bloomberg News survey of 41 economists. From a year earlier, the economy shrank 0.7 percent in the second quarter.
The German economy expanded 0.7 percent in the second quarter from the previous period, the Federal Statistics Office in Wiesbaden said today. Economists had forecast a gain of 0.6 percent.
French gross domestic product grew a more-than-anticipated 0.5 percent in the three months through June, the national statistics office Insee said today in Paris. That beat the median estimate of a 0.2 percent increase.
Portugal’s economy grew in the three months through June more than estimated after shrinking in the 10 previous quarters. Gross domestic product increased 1.1 percent from the first quarter, when it fell 0.4 percent, the Lisbon-based National Statistics Institute said today. Economists had predicted a rise of 0.1 percent.
The Stoxx 600 has still declined 0.6 percent from its peak on May 22 as Federal Reserve Chairman Ben S. Bernanke indicated the U.S. central bank could pare stimulus measures if the economy improves as forecast.
The Federal Open Market Committee will probably reduce its $85 billion in monthly bond buying at its next meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a cut in purchases at that meeting.
National benchmark indexes advanced in 12 of the 18 western European markets today. The U.K.’s FTSE 100 fell 0.4 percent, Germany’s DAX added 0.3 percent and France’s CAC 40 increased 0.5 percent.
Norway’s OBX index of the 25 most-traded stocks climbed to a record as the oil-heavy gauge benefits from higher crude prices. The measure rose 0.8 percent to its highest level since Bloomberg began compiling data in 1996.
Subsea 7 (SUBC) soared 8.5 percent to 121 kroner, its biggest gain since June 2010. The company posted a second-quarter net loss of $17.3 million, compared with forecasts for a loss of $131 million. Sales came in at $1.68 billion, beating analysts’ estimates for $1.65 billion.
Rentokil jumped 6.1 percent to 103 pence, its highest price since February 2011. The pest control and hygiene-services company reported a 5.2 percent increase in first-half operating profit and 3.7 percent rise in revenue as growth accelerated in the second quarter and business outside Europe picked up.
United Internet AG advanced 4.6 percent to 25.62, its highest price since at least 1998. The German provider of phone and Internet services raised its forecast for new customer contracts to 1.1 million from about 1 million, as it posted higher earnings before interest, tax, depreciation and amortization.
Swiss Life Holding AG (SLHN) gained 5.3 percent to 182.20 Swiss francs. Switzerland’s biggest life insurer reported an increase in first-half profit that exceeded analyst estimates after selling more policies in Switzerland and France.
Net income rose to 472 million Swiss francs ($506 million), from 364 million francs a year earlier. That beat the 367.9 million-franc average analyst estimate.
Wirecard AG advanced 4.6 percent to 23.95 euros, its highest price since at least 2000. The Internet payment-services company reported a gain of about 21 percent in first-half sales to 216.1 million euros ($286.5 million) and a 14 percent increase in pretax profit to 56.2 million euros.
RWE lost 4.5 percent to 21.36 euros. Germany’s second-largest utility said recurrent net income, the measure used to calculate the dividend, climbed to 1.99 billion euros from 1.67 billion euros a year earlier, missing the 2.1 billion-euro average estimate of analysts surveyed by Bloomberg.
Celesio AG slipped 1.1 percent to 16.30 euros. The company cut its 2013 forecast for adjusted earnings before interest and taxes to 405 million euros to 425 million euros, down from 445 million euros to 475 million euros, citing discount competition in the German wholesale market and additional negative currency effects.
Portugal Telecom SGPS SA tumbled 7.3 percent to 2.93 euros after cutting its annual dividend to 10 euro cents per share for 2013 and 2014 from 32.5 cents in 2012.
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