European stocks advanced, following their largest three-day slump in seven months, as mining companies climbed and banks rebounded from a three-week low.
BHP Billiton Ltd. and Rio Tinto Group both rose more than 1 percent. Banco Santander SA, which generates most of its sales from Latin America, gained 1.6 percent to halt an eight-day losing streak. F&C Asset Management Plc (FCAM) jumped 6.1 percent after Bank of Montreal agreed to buy the owner of the U.K.’s oldest investment fund for 708 million pounds ($1.2 billion).
The Stoxx Europe 600 Index increased 0.7 percent to 324.22 at the close of trading. The benchmark retreated 4.2 percent from Jan. 22 through yesterday as the Argentinian government’s decision to allow its currency to devalue triggered a rout in emerging-market currencies.
“We will start to see positive earnings surprises increase in Europe in the next few quarters,” said Didier Duret, who helps manage about $228 billion as chief investment officer at ABN Amro Private Banking in Amsterdam. “The correction we had in the past few days was more of a self-regulation from the market. The downturn is not a long-term trend and fundamental sentiment hasn’t changed.”
In the U.K., the Office for National Statistics said gross domestic product expanded 0.7 percent in its initial estimate for the final three months of 2013. That completes the first full year since 2007 when the economy expanded in every quarter.
In the U.S., a Commerce Department report showed orders of durable goods unexpectedly dropped 4.3 percent in December after climbing a revised 2.6 percent in November. Analysts surveyed by Bloomberg had predicted a gain of 1.8 percent. A separate release showed the Conference Board’s consumer-confidence index rose to 80.7 in January, beating the median economist estimate of 78. The index had a revised reading of 77.5 last month.
The Federal Reserve will begin its final two-day monetary-policy meeting under Chairman Ben S. Bernanke today. He leaves his post on Jan. 31. The central bank will probably reduce its monthly bond purchases in $10 billion increments over the next six meetings before announcing an end to the program no later than December, according to a Bloomberg survey this month.
A gauge of mining companies rebounded from its lowest level in almost two weeks. Nomura Holdings Inc. raised its rating on the industry to neutral from bearish. The brokerage’s Tyler Broda said companies may reduce costs by more than analysts predict. BHP Billiton and Rio Tinto, which Nomura named as its top picks, rose 1.2 percent to 1,802 pence and 2.3 percent to 3,213 pence, respectively.
Santander climbed 1.6 percent to 6.36 euros. The shares lost 5.3 percent in the three days through yesterday as emerging-market currencies from the Argentinian peso to the Brazilian real weakened. Banco Bilbao Vizcaya Argentaria SA, which relied on South America (BBVA) for 24 percent of its sales in 2012, rose 1.6 percent to 8.79 euros.
F&C Asset Management jumped 6.1 percent to 123.5 pence, its highest price since 2008. Bank of Montreal will pay 120 pence a share in cash for the money manager, the two companies said in a joint statement. F&C’s shareholders will also receive a dividend of 2 pence a share.
Siemens AG rose 1.6 percent to 98.94 euros as Europe’s largest engineering company said income from continuing operations in the first quarter of its financial year jumped 21 percent to 1.39 billion euros ($1.9 billion). The average estimate of analysts had called for 1.33 billion euros. The profit margin increased to 8.8 percent from 6.5 percent at Siemens’s energy business and widened to 7.6 percent from 3.4 percent at its infrastructure and cities division.
Afren Plc (AFR) rose 4.1 percent to 150.9 pence, halting a five-day decline that sent the shares to their lowest price in three months. The oil and gas explorer said total sales probably rose to $1.65 billion in 2013 from $1.5 billion in 2012, more than the $1.62 billion that analysts projected. Afren reports its full-year financial results on March 27.
Software AG rallied 7.2 percent to 27.50 euros after the German company forecast that earnings before interest and taxes may increase by as much as 10 percent in 2014 from last year’s 260.7 million euros.
JCDecaux SA added 4 percent to 31.93 euros after the outdoor-advertising company said so-called organic sales growth accelerated to 4.5 percent in the final three months of 2013. It was unchanged in the preceeding quarter. Deutsche Bank AG had predicted growth of 2.8 percent before the release.
Swedbank AB (SWEDA) fell 4.6 percent to 171 kronor. The Swedish lender said net income declined 15 percent to 3.61 billion kronor ($562 million) because of rising costs, missing the average analyst estimate of 4.03 billion kronor. Swedbank said it would pay a dividend of 10.10 kronor a share, less than the 10.50 kronor projection compiled by Bloomberg.
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