European stocks climbed the most in two months after a gauge of manufacturing in the euro area rose more than forecast and as investors awaited a Federal Reserve meeting starting tomorrow to gauge the timing of stimulus cuts.
Aggreko Plc (AGK) rallied the most since March after saying net debt will decline. Deutsche Telekom AG advanced 3.8 percent after a report said Sprint Corp. is considering a bid for T-Mobile US Inc. Moncler SpA surged 47 percent on the first trading day for the Italian luxury skiwear maker. UBM Plc (UBM) fell 3.7 percent after Kepler Cheuvreux said its 2014 margin forecast for the events business fell below some analysts’ estimates.
The Stoxx Europe 600 Index advanced 1.3 percent to 313.64 at the close of trading in London. The regional benchmark gauge fell for two straight weeks, the first back-to-back weekly losses since Oct. 4, as better-than-estimated U.S. economic data led some investors to speculate the Fed will decide to slow bond purchases as early as this week.
“It could be this Wednesday,” Trevor Greetham, director of asset allocation at Fidelity Worldwide Investments in London, who helps manage $260 billion, said of Fed tapering in an interview with Francine Lacqua on Bloomberg Television. “I don’t think the market will be as affected as you might think. The Fed keeps saying tapering isn’t tightening. They’re letting up on the accelerator, not braking.”
National benchmark indexes gained in all of the western European markets except Greece and Luxembourg. The U.K.’s FTSE 100 advanced 1.3 percent, France’s CAC 40 rose 1.5 percent and Germany’s DAX rallied 1.7 percent.
Euro-area factory output grew at a faster pace in December than economists had forecast, led by Germany. An index based on a survey of purchasing managers in the manufacturing industry increased to 52.7 from 51.6 in November, London-based Markit Economics said in a statement. That beat the estimate of 51.9 in a Bloomberg News survey of 35 economists. European Central Bank President Mario Draghi said at the European Parliament in Brussels today that euro-area fourth-quarter growth will be modest.
U.S. industrial production climbed in November by the most in a year, a report from the Federal Reserve showed today in Washington. Output at factories, mines and utilities rose 1.1 percent after a revised 0.1 percent gain in October that was previously reported as a decline. The median forecast in a Bloomberg survey called for a 0.6 percent increase.
A separate report showed a gauge of manufacturing in the New York region rose less than economists projected.
The Stoxx 600 fell 4.7 percent this month through Dec. 13 as economists saw an increased chance Fed policy makers will begin reducing stimulus. The Fed may begin reducing its $85 billion of monthly bond purchases at its Dec. 17-18 meeting, according to 34 percent of economists in a Dec. 6 Bloomberg survey, up from 17 percent in a Nov. 8 poll.
All 19 groups in the Stoxx 600 advanced. A gauge of construction and material companies posted the biggest gain, adding 2.2 percent.
Aggreko jumped 8.5 percent to 1,645 pence. The provider of mobile-power generators forecast debt will drop by 200 million pounds ($326 million) compared with the year-ago period. The company expects full-year results to beat estimates, according to a statement. It also announced contracts to provide temporary power to the FIFA World Cup in Brazil and the Commonwealth Games in Glasgow next year.
Deutsche Telekom climbed 3.8 percent to 11.79 euros. Sprint is studying antitrust concerns and may make a bid for T-Mobile in the first half of next year, the Wall Street Journal reported, citing people familiar with the matter. Deutsche Telekom merged its T-Mobile USA unit with MetroPCS Communications Inc.
Moncler rose to 14.97 euros, or 47 percent higher than its initial public offering price, after investors sought about 27 times the amount of stock available. Moncler’s private-equity owners have raised about 784 million euros ($1.08 billion) after selling shares at the top of a targeted range and exercising an over-allotment option.
Hennes & Mauritz AB (HMB) advanced 1.7 percent to 283.10 kronor. Europe’s second-biggest clothing retailer said revenue at stores and operations open at least a year rose 10 percent last month compared with a year earlier. That topped the 4 percent gain estimated in a survey of analysts by SME Direkt. It was the biggest advance in same-store sales in 20 months. The Stockholm-based company’s total sales rose 21 percent in November, compared with a projected 14 percent gain.
Klepierre SA rose 1.4 percent to 33.20 euros. Carrefour SA joined a group of institutional investors to buy 127 European shopping malls from Klepierre in a 2 billion-euro transaction. Carrefour will have a 42 percent stake in a company that combines the sites with 45 malls it owns in France. Carrefour added 1.9 percent to 27.70 euros.
UBM lost 3.7 percent to 650 pence, the lowest price in more than five months. The publisher of InformationWeek forecast a margin for its events unit of about 30 percent. Kepler Cheuvreux said that’s less than the average analyst estimate of 31.5 percent. UBM forecast 2013 revenue will be 800 million pounds.
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