European Stocks Rally for Second Week Amid U.S. Optimism

European stocks rallied for a second week, closing at their highest level since May 2008, following better-than-forecast U.S. economic data and after the International Monetary Fund said it will raise its growth outlook for the nation.

Chipmakers ARM Holdings Plc and Dialog Semiconductor Plc climbed more than 2.9 percent each after Apple Inc. struck a deal with China Mobile Ltd. to sell the iPhone in the world’s biggest handset market. British Sky Broadcasting Group Plc rose 6.4 percent on speculation Vodafone Group Plc will bid for the company. International Personal Finance Plc tumbled 25 percent after its Polish unit was fined.

The Stoxx Europe 600 Index rose 2 percent to 327.68 this week. The equity gauge, which fell in the first two weeks of December, is on track for a monthly increase of 0.8 percent. The index has gained 17 percent this year as central bankers around the world pledged to leave interest rates near record lows for a prolonged period.

“Typically, December is one of the strongest months for equities,” said Christoph Hock, an equity-sales trader at Alpha Wertpapierhandels GmbH in Frankfurt. “Unlike previous years where you’ve had a strong December, this year you’ve had a weak start. Now markets are making up for lost time.”

The Stoxx 600 climbed every December since 2009, data compiled by Bloomberg show. European exchanges were closed for more than two days for the Christmas holiday and Boxing Day.

Jobless Claims

A U.S. Labor Department report on Dec. 26 showed that jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Separate data on Dec. 24 showed orders for durable goods and and sales of new homes topped forecasts.

The IMF will increase its outlook for the U.S. economy as falling unemployment and a budget deal ease doubts about the future, Managing Director Christine Lagarde said in an interview broadcast Dec. 22 on NBC’s “Meet the Press.” While she didn’t set out any new forecasts, the Washington-based fund usually issues revised projections in January.

National benchmark indexes rose. The U.K.’s FTSE 100 (UKX) advanced 2.2 percent, while France’s CAC 40 and Germany’s DAX gained 2 percent.

Apple Deal

ARM Holdings rose 3.6 percent and Dialog climbed 2.9 percent. China Mobile will sell the iPhone 5s and 5c models in its retail stores from Jan. 17. The agreement ends six years of negotiations and gives Apple access to a market of 1.2 billion wireless subscribers.

BSkyB climbed 6.4 percent. The Daily Mail reported that there was speculation Vodafone may bid for the company to bundle its broadband, TV and landline offerings with Vodafone’s mobile services.

Aareal Bank AG rallied 9.2 percent after acquiring Corealcredit Bank AG for 342 million euros ($471 million). Corealcredit specializes in commercial property financing in Germany. HSBC Holdings Plc raised the shares to overweight, the equivalent of a buy, from neutral, or hold, after the announcement.

Lanxess AG rose 5.7 percent after Chief Executive Officer Axel Heitmann told a newspaper that the chemicals company will meet its earnings forecast this year.

Royal Boskalis Westminster NV advanced 3.6 percent. The Dutch dredging company said its Dockwise business won a contract to transport equipment from China and Malaysia to Chevron Corp.’s Wheatstone project in Western Australia. Separately, the Het Financieele Dagblad newspaper reported that Boskalis initiated talks to buy Fairmount Marine BV, citing a company spokesman.

International Personal Finance plunged 25 percent. The lender of small, unsecured cash loans said the Polish Office of Consumer Protection and Competition fined its local unit 2.4 million pounds ($4 million) for infringing consumers’ interests.

To contact the reporter on this story: Trista Kelley in London at tkelley2@bloomberg.net

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

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