European Stocks Advance After Best Weekly Rally of 2014

European stocks climbed after posting their biggest weekly gain this year, led by increases in real estate, mining and telecommunications companies.

Hammerson Plc (HMSO) advanced 3.1 percent after reporting a jump in profit. Polymetal International Plc gained 4 percent. Vodafone Group Plc and BT Group Plc rose at least 1.9 percent each. SGL Carbon SE jumped the most since March 2009 after Bayerische Motoren Werke AG said the two companies are building a second production hall at a jointly run plant to meet rising demand for carbon fiber. Neste Oil Oyj dropped 4.4 percent after Nordea Bank AB reduced its rating on the stock.

The Stoxx Europe 600 Index rose 0.4 percent to 334.56 at the close in London for its eighth increase in nine days. The gauge advanced 2.5 percent last week after the Federal Reserve said its stimulus policy will remain responsive to economic data and as companies from Renault SA to ThyssenKrupp AG reported profit that beat analysts’ projections.

“In the short-term, speculative froth has been removed,” said Benedict Goette, chief executive officer of Compass Capital AG in Zurich, which helps oversee about 700 million Swiss francs ($785 million). “We are currently looking for another little up-leg into March or so. Today looks like a calm day, with U.S. markets closed.”

The number of shares changing hands in Stoxx 600-listed companies was 34 percent lower than the 30-day average, according to data compiled by Bloomberg based on volumes at this time of the day.

Chinese Lending

In China, a report showed that new credit in the world’s second-biggest economy rose to a record last month. Aggregate financing, the broadest measure of credit in China, was 2.58 trillion yuan ($425 billion) last month, the People’s Bank of China said in a Feb. 15 statement. New local-currency lending was 1.32 trillion yuan, the highest level since 2010. Trust loans, under scrutiny because of default risks, were about half the level of a year earlier.

“The better-than-expected credit data out of China gives the markets some support,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “There are fears that the measures taken by China are hitting the breaks too hard and that the economy won’t grow as fast anymore. Today’s numbers speak a different language.”

National benchmark indexes advanced in 12 of the 18 western-European markets today. France’s CAC 40 slipped 0.1 percent and Germany’s DAX was little changed, falling less than 0.1 percent. The U.K.’s FTSE 100 rallied 1.1 percent.

Hammerson Rises

Hammerson rose 3.1 percent to 560.5 pence after reporting that pretax profit jumped to 341.2 million pounds ($570 million) in 2013 from 142.2 million pounds in 2012. Adjusted net asset value increased 5.7 percent to 573 pence on Dec. 31, Britain’s third-largest real estate company by market value said in a statement. Real estate companies in the Stoxx 600 posted the biggest rally among 19 industry groups today.

Polymetal advanced 4 percent to 684 pence and Randgold Resources Ltd. rose 1.7 percent to 4,857 pence as a gauge of European mining companies jumped 1 percent, the second-biggest industry-group gain.

Vodafone (VOD), Europe’s biggest mobile-phone operator, added 1.9 percent to 222.5 pence, and BT Group gained 2 percent to 404.3 pence, with telecommunication stocks increasing 0.9 percent.

SGL Carbon jumped 13 percent to 30.71 euros. German newspaper Handelsblatt reported that SGL Carbon and BMW, which owns a 15.7 percent stake in the company, are investing more than 100 million euros ($137 million) to double carbon-fiber production to 6,000 tons a year.

BMW slipped 1.2 percent to 84.93 euros.

Essar Energy

Essar Energy Plc (ESSR) increased 3.3 percent to 68.2 pence. The Indian power producer and oil refiner said it has formed an independent committee to consider a takeover proposal by Essar Global Fund Ltd. EGFL, which owns 78 percent of Essar Energy, may offer 70 pence a share for the stock it doesn’t already own and 80 cents apiece for convertible bonds, according to a statement yesterday.

RSA Insurance Group Plc gained 2.5 percent to 98.2 pence. Sky News reported yesterday that the U.K. insurer has begun an auction of Noraxis Capital Corp., a network of regional insurance brokers in Canada. The sale could raise as much as 200 million pounds ($335 million), Sky News said, without citing anyone.

MorphoSys AG added 1.9 percent to 64.71 euros. The German biotechnology company said it received a milestone payment from Novartis AG (NOVN) for its application to start the first phase of human testing for an anti-inflammatory treatment.

Luxottica Rises

Luxottica Group SpA climbed 1.6 percent to 39.48 euros. Chief Executive Officer Andrea Guerra said he won’t join the new Italian government and will remain at his job at the world’s largest maker of eyeglasses.

Neste Oil dropped 4.4 percent to 14.90 euros after Nordea Bank AB cut Finland’s only oil refiner to hold from buy, meaning it no longer recommends buying the stock. The brokerage cited uncertainty on a biodiesel tax credit.

Hellenic Telecommunications Organization SA (HTO) declined 1.9 percent to 12.25 euros. The Greek government is close to selling a 10 percent stake in the Athens-based phone operator to Deutsche Telekom AG, To Vima reported without citing anyone.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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