European Stocks Gain; Hochtief, Xstrata, Bank of Ireland Rise

Dec. 6 (Bloomberg) -- European stocks rose, led by basic-resources and chemical shares, as Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank may expand its bond-purchase program beyond the $600 billion announced last month.

Hochtief AG advanced 4.3 percent after the company said Qatar Holding LLC aims to become a major shareholder in the builder. Xstrata Plc rose with copper, while BASF SE climbed as Goldman Sachs Group Inc. raised its stance on the chemical industry. Bank of Ireland Plc surged 13 percent after J. Christopher Flowers signaled he is continuing to look for Irish banking assets.

The Stoxx Europe 600 Index increased 0.2 percent to 271.38 at the 4:30 p.m. close in London. The benchmark gauge advanced 1.6 percent last week as the European Central Bank delayed its withdrawal of emergency liquidity measures and bought Portuguese and Irish government bonds. The measure has risen to within 1 percent of this year’s highest level on Nov. 9.

Bernanke “can’t really reduce interest rates any further so he has to go down the route of purchasing more debt,” Manoj Ladwa, a London-based senior trader at Monecor London Ltd., said on Bloomberg Television. “It’s pretty much the only thing he’s got left in his arsenal.”

Fed Chairman Bernanke said the U.S. economy is barely expanding at a sustainable pace and it’s possible policy makers may expand bond purchases.

‘Certainly Possible’

The purchase of more bonds than planned is “certainly possible,” Bernanke said in an interview broadcast yesterday by CBS Corp.’s “60 Minutes” program. “It depends on the efficacy of the program” and the outlook for inflation and the economy.

National benchmark indexes rose in 9 out of 17 western European markets that were open. Germany’s DAX Index added 0.1 percent, the U.K.’s FTSE 100 gained 0.4 percent and France’s CAC 40 slipped less than 0.1 percent. Finnish markets were closed for the Independence Day holiday.

European finance ministers are gathering in Brussels for their monthly meeting today as officials voiced divisions over the steps needed to stop the sovereign debt crisis after contagion spread from Greece and Ireland.

Belgian Finance Minister Didier Reynders told reporters on Dec. 4 that the region’s 750 billion-euro ($1 trillion) bailout fund might be expanded if ministers decide to introduce a larger permanent facility when the current temporary one expires, breaking ranks with German Chancellor Angela Merkel and France’s Nicolas Sarkozy. Luxembourg and Italy today called for the creation of joint European bonds, a move rebuffed by German Finance Minister Wolfgang Schaeuble.

Hochtief, Qatar

Hochtief, which is battling a takeover bid by Spain’s Actividades de Construccion y Servicios SA, gained 4.3 percent to 62.68 euros. Qatar Holding is aiming to own almost 9.1 percent of the German builder after Hochtief announced today it will increase its capital stock by about 10 percent by issuing shares at 57.114 euros each.

Xstrata, the world’s fourth-largest copper producer, increased 3.4 percent to 1,437 pence, while Rio Tinto Group, the world’s third-largest mining company, added 0.9 percent to 4,456.5 pence. Copper, lead and nickel advanced on the London Metal Exchange.

ThyssenKrupp AG climbed 3.2 percent to 31.04 euros as Citigroup Inc. lifted its price forecast on Germany’s largest steelmaker to 40 euros from 30 euros.

BASF, the world’s biggest chemical company, increased 1.4 percent to 60.02 euros. Lonza Group AG rallied 2.9 percent to 81.1 Swiss francs and Syngenta AG gained 1.5 percent to 283 francs as Goldman Sachs upgraded European chemical companies to “neutral” from “cautious.”

Lonza, Syngenta

The brokerage raised its share-price forecast for Lonza, the world’s largest maker of drug ingredients, to 95 francs from 83 francs, and that for Syngenta to 410 francs from 325 francs.

Bank of Ireland soared 13 percent to 36.4 euro cents after Flowers, founder of New York-based private equity firm J.C. Flowers & Co., said in an interview that “if we can find the right opportunity to invest in Ireland, we would like to do that.”

Punch Taverns Plc rallied 6.6 percent to 69.25 pence after the Mail on Sunday reported that CVC Capital Partners Ltd. is in talks with Punch’s adviser Goldman Sachs Group Inc. about a possible bid for the company, without saying where it got the information.

TPG Capital is also talking to Goldman about buying some or all of the assets, the newspaper said. TDR Capital LLP, Apax Partners LLP, Bridgehouse Capital, Charterhouse Capital Partners LLP and Cinven Ltd. are also interested, the Mail reported.

De La Rue Rallies

De La Rue Plc jumped 30 percent to 841 pence, the biggest gain in at least 15 years, after the world’s biggest printer of banknotes rejected an 896 million-pound ($1.4 billion) takeover approach from closely-held rival Francois-Charles Oberthur Fiduciaire SA.

Suedzucker AG surged 8.5 percent to 18.29 euros as Deutsche Bank AG raised its recommendation on the world’s largest sugar refiner to “buy” from “hold.”

Deutsche Postbank AG paced declining shares, losing 9 percent to 20.11 euros. The retail lender’s stock will leave Germany’s MDAX benchmark index for medium-sized companies on Dec. 8 after its proportion of shares trading freely dropped below 10 percent.

Michelin & Cie. dropped 3 percent to 54.58 euros after UBS AG lowered the world’s second-largest tiremaker to “sell” from “neutral” and cut its 2011 earnings estimate by 13 percent.

Desire Petroleum Plc plunged 50 percent to 67.25 pence, the largest drop since at least 1998, after the U.K. energy explorer said the Rachel North well off the Falkland Islands won’t produce oil. That reversed the company’s Dec. 2 report that the well may have made a commercially viable find.

Rockhopper Exploration Plc, which has a 7.5 percent stake in the Rachel well, said testing showed some reservoirs were mostly water bearing with residual oil. The shares retreated 9.8 percent to 310 pence.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.