European Stocks Rise to Highest Since 2008; Barclays Leads Gains

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European stocks rose for a third day, sending the Stoxx Europe 600 Index to its highest level since September 2008, as companies from Barclays Plc to Danone posted results that beat analysts’ estimates.

Barclays, Britain’s third-largest bank, climbed 5.8 percent. UniCredit SpA led Italian stocks higher. Danone, the world’s biggest yogurt maker, advanced 3.3 percent. Deutsche Boerse AG fell as the exchange operator agreed to combine with NYSE Euronext. Rio Tinto Group, the third-largest mining company, paced mining stocks lower.

The Stoxx 600 rose 0.1 percent to 289.44 at the 4:30 p.m. close in London. The measure has gained 83 percent from the 12-year low that it reached in March 2009 as investors bet the strengthening global economic recovery will help boost corporate profits. About 56 percent of the companies in the index that have reported annual profit since Jan. 10 have topped analysts’ estimates for per-share profit, Bloomberg data show.

“For the moment, the motor is the transfer of money into stocks and that’s confirmed by 2010 earnings,” said Yves Maillot, head of investments at Robeco Gestion in Paris, which oversees $5.41 billion. “Earnings have been the wind carrying the market. In the short term, we may have a correction. For the past month, investors have been looking at all of the positive points. We could have new questions on the situation as a whole.”

The rally in the Stoxx 600 has pushed the measure to about 15.5 times the reported earnings of its companies, near the highest level in nine months, according to data compiled by Bloomberg.

More Bullish

Money managers are more bullish on global stocks this month than at any time in the past decade, according to a BofA Merrill Lynch Global Research survey. A net 67 percent of respondents, who together manage $569 billion, had an “overweight” position on global equities, the highest level since the survey first asked the question in April 2001.

In the U.S., a report showed January retail sales rose 0.3 percent, less than the forecast for a 0.5 percent increase in a survey of economists.

Elsewhere, a gauge of investor confidence in Germany increased for a fourth month in February and U.K. inflation accelerated to the fastest pace in more than two years in January. In China, where the central bank last week raised interest rates, inflation climbed in January 4.9 percent, exceeding the government’s 2011 for a fourth month.

Benchmark gauges in Italy, Portugal and Spain rose the most out of 18 western European markets. The region’s governments agreed to double the lending capacity of the rescue fund for debt-laden countries in 2013, while seeing no need for immediate steps to shield Portugal from the fiscal crisis.

Emergency Aid

Finance ministers decided that the future emergency aid mechanism will be able to lend 500 billion euros ($675 billion), twice the size of the fund set up in the wake of Greece’s near-default last year.

National benchmark indexes rose in 10 of the 18 western European markets. France’s CAC 40 climbed 0.3 percent and Germany’s DAX rose 0.1 percent. The U.K.’s FTSE 100 lost 0.4 percent.

Barclays gained 5.8 percent to 328.75 pence. The bank said full-year net income was 3.6 billion pounds ($5.77 billion), beating a forecast of 3.2 billion pounds in a survey of analysts, as investment-banking profit almost doubled and writedowns shrank.

UniCredit, Italy’s largest bank, increased 3.3 percent to 1.91 euros. The stock was raised to “buy” from “sell” at Societe Generale SA.

Water Sales

Danone, the world’s biggest yogurt maker, advanced 3.3 percent to 45.42 euros. The company said full-year profit rose 18 percent on sales of Aqua bottled water and Dumex infant formula in Asia.

Profit from continuing businesses and excluding one-time items rose to 1.67 billion euros from 1.41 billion euros a year ago, the company said. The median estimate of analysts surveyed by Bloomberg News was for profit at that level of 1.66 billion euros.

Deutsche Boerse AG lost 2.4 percent to 59.85 euros. The operator of the Frankfurt bourse and NYSE Euronext said they will combine, creating the world’s largest owner of equities and derivatives markets. London Stock Exchange Group Plc, which last week agreed to buy Canada’s TMX Group Inc., slid 3.2 percent to 900 pence.

Mining Stocks

Rio Tinto fell 2.8 percent to 4,550 pence. Kazakhmys Plc, Kazakhstan’s biggest copper miner, lost 2.6 percent to 1,538 pence. A gauge of basic-resource companies on the Stoxx 600 slipped 1.8 percent, the worst performance out of 19 industry groups.

Anglo American Plc, which controls the world’s largest producer of platinum, slipped 3.8 percent to 3,306.5 pence. The stock was cut to “hold” from “buy” at Citigroup.

Imtech NV fell 1.5 percent to 27.82 euros. The largest Dutch technical-services company said full-year net income rose to 140 million euros from 126 million euros a year earlier. That compares to a forecast for 141 million euros in a survey of analysts.

Trelleborg AB, the world’s biggest maker of vibration-dampening gear, tumbled 10 percent to 62.85 kronor after reporting quarterly earnings that missed analysts’ estimates.

Micro Focus Plc sank 26 percent to 291 pence, the biggest drop since August, after the software company said revenue and adjusted earnings before interest, tax, depreciation and amortization in the three months ended Jan. 31 were below management forecasts.

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