Most European Stocks Rise Amid German Confidence Report

Most European stocks advanced as German business confidence rose to the highest level since April 2012 and investors weighed comments by European Central Bank officials.

Daily Mail & General Trust Plc (DMGT) gained 3.5 percent after Barclays Plc upgraded its recommendation on the newspaper publisher. Whitbread Plc climbed 3 percent after JPMorgan Chase & Co. raised its rating of the company to overweight, similar to buy. Rhoen-Klinikum AG fell 3.3 percent after saying its second-biggest shareholder sued to block the sale of 43 clinics to Fresenius SE’s Helios unit.

The Stoxx Europe 600 Index added 0.1 percent to 322.77 at the close, as almost three shares in the gauge increased for every two that fell. The benchmark lost less than 0.1 percent this week as Federal Reserve minutes signaled policy makers may reduce $85 billion of bond purchases sooner than investors predicted. Future volatility in euro-area stocks, estimated by options prices, fell to the lowest level since February 2007.

“The German business confidence data supports the view that economic growth could increase going into the new year,” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen, said in a telephone interview. “Stocks are moving up a lot which is being confirmed for the most part by positive data which creates a momentum effect.”

The Ifo institute’s German business climate index, based on a survey of 7,000 executives, increased to 109.3 this month from 107.4 in October. That beat economists’ forecast for a gain to 107.7, according to a Bloomberg News survey.

Budget Oversight

Euro-area finance ministers are meeting in Brussels today. The ministers will examine national budgets a week after the European Commission raised doubts about the credibility of Italy’s and Spain’s spending plans, warning they don’t go far enough to narrow deficits or reduce debt. The meeting is part of tougher budget-oversight rules introduced last year.

ECB governing council member Peter Praet said at a conference in Paris that Europe has a debt overhang problem that needs to be addressed “forcefully.” Policy makers have already lost time in tackling it, he said. His colleague in the council and Bank of Austria governor, Ewald Otto Nowotny, said the regional economy has too little demand and fixing the banking system alone isn’t enough to end the crisis.

National benchmarks rose in 13 of the 18 western European markets. The U.K.’s FTSE 100 slid 0.1 percent. Germany’s DAX gained 0.3 percent. France’s CAC 40 added 0.6 percent.

Rating Changes

Daily Mail climbed 3.5 percent to 893 pence, its highest price since January 2001. Barclays upgraded the stock to equal weight from underweight. The brokerage said it sees no factors that could drive down the stock price in the next 12 months.

Whitbread climbed 3 percent to 3,483 pence. JPMorgan Chase raised its recommendation on the owner of Premier Inn budget hotels to overweight from neutral. The brokerage cited the economic rebound in the U.K.

“We expect Premier Inn to outperform on the back of its dynamic pricing and benefit from its asset-heavy structure in an upswing,” JPMorgan analyst Komal Dhillon wrote.

Bankia SA, the Spanish lender that posted a record 19 billion-euro ($25 billion) loss in 2012, jumped 5.8 percent to 95.6 euro cents after Chairman Jose Ignacio Goirigolzarri said he doesn’t sense the government has “any rush at all” to sell its stake in the nationalized lender.

Shareholder Resistance

Rhoen-Klinikum fell 3.3 percent to 20.45 euros. B. Braun Melsungen AG, which holds a 10.98 percent stake in the company, asked the court to void the sale of clinics or rule it needs 90 percent shareholder support, Rhoen-Klinikum said in a statement. In September, Helios agreed to pay Rhoen-Klinikum 3.07 billion euros ($4.1 billion) for the German clinics, a deal that would create Europe’s largest chain of private hospitals.

TUI Travel Plc tumbled 7.8 percent to 359 pence as Norwegian billionaire John Fredriksen sold his entire stake in the company and bought more stock in parent company TUI AG.

Suedzucker AG, which makes sugar, starch and bakery additives, retreated 7.9 percent to 19.15 euros after the shares were downgraded to reduce from buy by Commerzbank AG.

Paddy Power Plc (PAP) lost 4.1 percent to 55.01 euros after rival William Hill Plc replaced it as one of Citigroup Inc’s most-preferred stocks.

The volume of shares changing hands in companies listed on the Stoxx 600 was 22 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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