European stocks gained for a fourth day, extending their highest level since July, as insurance companies rallied, outweighing a report that showed consumer confidence in the U.S. unexpectedly declined.
Subsea 7 SA jumped 5.3 percent after declaring a special dividend and saying it will buy back shares. Tullow Oil Plc advanced 3.9 percent after saying it found oil off the coast of Ghana. Allianz SE contributed the most to a rally by a gauge of insurance companies as yields on U.S. Treasuries climbed.
The Stoxx Europe 600 Index rose 0.5 percent to 272.4 at the close. The benchmark measure climbed to its highest level since July 8. The gauge has gained 2.6 percent this week and 11 percent this year amid optimism that the euro area will contain its debt crisis and as U.S. economic reports topped estimates.
“There is still more room to run,” Patrick Moonen, senior strategist at ING Investment Management in The Hague, said in a Bloomberg Television interview. “Many investors are still rather cautiously positioned and they are still in the beginning of shifting their positions from out of defensive sectors, out of defensive asset classes towards equities.”
The Stoxx 600 is trading at 11.3 times the estimated profits of its members, according to data compiled by Bloomberg, compared with 9.1 times in September. The jump in the ratio is the steepest for any six-month period since October 2009, the data show.
European stocks rose 0.3 percent yesterday as jobless claims and manufacturing reports added to optimism that the U.S. economic recovery is gaining momentum.
VStoxx Index Slides
The VStoxx Index, which measures the cost of option prices on the Euro Stoxx 50 Index, slid 4.3 percent to 18.52 today, its lowest level since April 2011. The European volatility gauge has plunged 65 percent since its almost 32-month high on Sept. 12 and is 30 percent below its historical average before today of 26.38, according to data compiled by Bloomberg going back to January 1999.
The volume of shares changing hands on the Euro Stoxx 50 Index was 71 percent greater than the average over the past 30 days, according to data compiled by Bloomberg.
National benchmark indexes rose in 16 of the 18 western-European markets. Germany’s DAX Index gained 0.2 percent. The U.K.’s FTSE 100 Index and France’s CAC 40 Index rose 0.4 percent.
U.S. Consumer Confidence
In the U.S., the Thomson Reuters/University of Michigan preliminary index of consumer confidence fell to 74.3 in March from 75.3 in February. That missed the average of 70 economist estimates for a reading of 76.
A gauge of industrial production in the world’s largest economy was unchanged in February, according to a report from the Federal Reserve. Economists had forecast that the gauge would rebound 0.4 percent from January.
Subsea 7 rallied 5.3 percent to 143 kroner. The oilfield-services provider formerly known as Acergy SA proposed a share buyback of as much as $200 million and a special dividend of 60 cents. Subsea 7 also posted fourth-quarter sales of $1.42 billion. That beat analysts’ estimates for revenue of $1.38 billion.
Tullow Oil advanced 3.9 percent to 1,528 pence. The oil company said the Enyenra-4A appraisal well in the Deepwater Tano license off the coast of Ghana encountered oil in “very good quality” sandstone reservoirs.
Allianz, Swiss Life
Allianz, Europe’s biggest insurer by market capitalization, rose 1.6 percent to 94 euros. Swiss Life Holding AG, Switzerland’s largest life insurer, added 3.1 percent to 114.90 Swiss francs. AXA SA, Europe’s second-largest insurer by market value, increased 1.9 percent to 13.18 euros. Prudential Plc, the U.K.’s biggest insurer, added 1.5 percent to 791.5 pence.
Royal Bank of Scotland Group Plc rose 6.3 percent to 28.14 pence after the stock was raised to buy from neutral at UBS AG.
Vestas Wind Systems A/S, the world’s biggest wind-turbine producer, jumped 4.7 percent to 63.95 kroner, its fourth day of gains. China’s wind-turbine industry will consolidate because of a supply glut and declining prices that have cut profitability, according the country’s biggest producer Sinovel Wind Energy Group Co.
Porsche SE and Daimler AG sank 3.6 percent to 47.55 euros and 2.5 percent to 47.23 euros, respectively, after the shares were downgraded at Sanford C. Bernstein & Co. Porsche was cut to underperform from market perform and Daimler, the world’s third-biggest luxury-car maker, was downgraded to market perform from outperform.