Most European stocks climbed as Libya declared an immediate cease-fire and the Group of Seven nations sold yen to ease concern that Japan will sink into recession following the March 11 earthquake.
Parmalat SpA advanced 4 percent after Groupe Lactalis said it has a direct holding of 7.28 percent in the company. Veolia Environnement SA jumped 3 percent after CA Cheuvreux raised its recommendation on the world’s biggest water utility.
The Stoxx Europe 600 Index increased 0.2 percent to 267.63 at the 4:30 p.m. close in London, as three stocks rose for every one that fell. The benchmark declined 2.8 percent this past week after the Japanese tremor and ensuing tsunami caused the country’s Fukushima Dai-Ichi nuclear power station to discharge radioactive vapor into the atmosphere.
“The gains are because of the news out of Libya,” said Guillaume Chaloin, a fund manager at Meeschaert Asset Management in Paris, which oversees $3.5 billion in assets. “This gives stocks a breath of air. The market has been alternating between all that has been happening in Japan and Libya.”
The G-7 jointly intervened in the foreign-exchange market for the first time in more than a decade, selling yen as their markets opened. The strong yen had threatened to hamper Japan’s recovery from its worst postwar crisis by curtailing the earnings of its exporters. Japan began the effort, with Europe’s central banks following up in their markets, sending the currency down the most against the dollar since 2008.
Japan’s Nuclear Plant
Workers may restore power to one of the tsunami-struck reactors at the crippled atomic plant, improving the odds that the utility’s owner Tokyo Electric Power Co. can prevent a meltdown and further radiation leaks.
“The situation in Japan is being followed closely and it looks like they are containing the problem,” said Jerome Forneris, who helps manage $11 billion at Banque Martin Maurel in Marseille. “The Japanese central bank intervention is breaking speculation on the yen and will prevent the competitiveness of Japanese exporters from being hurt. That’s favorable for stocks.”
Stocks extended earlier gains after Libya’s Foreign Minister Moussa Koussa said that the government in Tripoli has ceased all military action. Yesterday, the United Nations Security Council authorized the U.S., the U.K., France and certain Arab nations to “take all necessary measures” other than putting “a foreign occupation force of any form on any part of Libyan territory.”
National benchmark indexes rose in all of the 18 western European markets except Greece and Ireland. France’s CAC 40 Index advanced 0.6 percent. The U.K.’s FTSE 100 Index increased 0.4 percent and Germany’s DAX Index rose 0.1 percent.
Parmalat gained 4 percent to 2.60 euros after Lactalis, the maker of President butter, said it has a direct holding of 7.28 percent in the Italian food company and an additional 4.14 percent under an equity swap contract. Lactalis said it plans to submit a list of candidates for Parmalat’s board at the company’s shareholder meeting on April 12 and April 14.
Veolia increased 3 percent to 21.75 euros after Cheuvreux raised its recommendation on the world’s biggest water utility to “outperform” from “underperform.”
SAP AG gained 1.6 percent to 40.73 euros after the world’s largest maker of business-management software proposed a 20 percent increase in its annual dividend to 60 euro cents a share.
Actelion Ltd., whose shareholder Elliott Advisors (UK) Ltd. is trying to remove management, climbed 2.9 percent to 49.60 Swiss francs, after Vontobel AG predicted that the shares have further to rise.
“We see potential for the share price to climb up to 72 francs,” Andrew Weiss, an analyst at Vontobel, wrote in a note to customers.
Voestalpine AG soared 2.3 percent to 31.81 euros. Austria’s biggest steelmaker was raised to “buy” from “hold” at BofA Merrill Lynch Global Research.
PubliGroupe SA surged 6.4 percent to 114.90 francs after Switzerland’s largest advertising company confirmed its return to profitability. PubliGroupe reported 2010 net income of 42.6 million francs ($47.3 million).
Berkeley Group Holdings Plc, the U.K.’s second-largest homebuilder by market value, gained 3.6 percent to 1,040 pence after forecasting that its full-year profit will climb to the top of its previous range of predictions.
FLSmidth & Co. A/S, the world’s biggest maker of cement kilns, gained 4.9 percent to 454.30 kroner, the largest gain on the Stoxx 600. Jyske Bank A/S raised its recommendation on the shares to “buy” from “reduce.”
Titan Cement Co. SA slumped 6.3 percent to 16.26 euros. Greece’s largest cement producer said that demand for the building material slumped 30 percent in the first two months of this year from the same period in 2009.