European Stocks Climb to Highest Since March

European Stock Futures Advance Before U.S. House-Building Report
In the U.S., house building held near a four-year high in July, according to economists surveyed before a report from the Commerce Department due at 8:30 a.m. in Washington. Photographer: Ty Wright/Bloomberg

European stocks advanced to their highest level since March as U.K. retail sales beat forecasts and U.S. building permits jumped to their highest in four years.

Novozymes A/S, the world’s biggest maker of industrial enzymes, gained 4.8 percent after reporting second-quarter profit that exceeded analysts’ projections. Mediaset SpA surged 11 percent amid reports Middle East investors are buying shares in the Italian broadcaster. Telekom Austria AG slid 5.6 percent after cutting its profit and sales forecast for 2012.

The Stoxx Europe 600 Index climbed 0.3 percent to 271.22 at the close, its highest level since March 19. European stocks have rallied for the last 10 weeks amid optimism that policy makers will do more to stimulate the global economy. The Stoxx 600 has surged 16 percent from its lowest level this year on June 4.

“It seems that investors are comfortable with building a degree of risk in anticipation of stimulus measures from the Federal Reserve and the European Central Bank,” said Ishaq Siddiqi, a market strategist at ETX Capital in London. “The weaker the data, the more likely we are to see a response from the Fed.”

The volume of shares changing hands on the Stoxx 600 was 17 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

In the U.K., retail sales rose 0.3 percent in July, the Office for National Statistics said in London. The median forecast of economists surveyed by Bloomberg had called for a 0.1 percent decline. The ONS also revised sales in June to a 0.8 percent gain from a 0.1 percent advance.

U.S. Data

In the U.S., building permits climbed to 812,000, the most since August 2008. House building dropped more than economists had predicted, a Commerce Department report showed. Builders broke ground on 746,000 properties at an annual rate, a drop of 1.1 percent from June. That missed the 756,000 median estimate of economists in a Bloomberg survey.

A Labor Department report showed jobless claims rose to 366,000 last week from 364,000 a week earlier. The median forecast of economists in a Bloomberg News survey had called for an increase to 365,000.

A Federal Reserve Bank of Philadelphia report showed that manufacturing in its region shrank more than economists had forecast. The index climbed to minus 7.1 in August from minus 12.9 in July. The Bloomberg survey median had called for a reading of minus 5. Figures less than zero indicate contraction.

National benchmark indexes advanced in 15 of the 18 western European markets. U.K.’s FTSE 100 Index added less than 0.1 percent. France’s CAC 40 Index rose 0.9 percent and Germany’s DAX Index increased 0.7 percent.

China FDI

Foreign direct investment in China slid 8.7 percent from a year earlier to $7.58 billion, a release from the Ministry of Commerce in Beijing showed today. That was the eighth drop in nine months and the smallest inflow since July 2010.

Premier Wen Jiabao said there’s “growing room for monetary policy operation,” state television reported yesterday.

Novozymes climbed 4.8 percent to 158 kroner after posting second-quarter net income of 495 million kroner ($82 million), exceeding analyst estimates of 483 million kroner. The company predicted Ebit of as much as 24 percent of sales in 2012. It had forecast a margin of no more than 23 percent.

Tesco, M&S

Tesco Plc advanced 1.7 percent to 338.3 pence after British retail sales beat forecasts. Marks & Spencer Group Plc added 1.6 percent to 360 pence and Home Retail Group Plc gained 4.1 percent to 93 pence.

African Barrick Gold Plc surged 8 percent to 425 pence after Toronto-based parent Barrick Gold Corp. said it has held talks to sell its stake in the company to China National Gold Group Corp.

Hikma Pharmaceuticals Plc jumped 3.4 percent to 749.5 pence after reiterating its projection for 20 percent sales growth in 2012. First-half revenue rose 35 percent to $532.3 million from a year earlier, the company said.

Mediaset SpA surged 11 percent to 1.57 euros on speculation investors from the Middle East are buying the Italian broadcaster’s shares and may seek to become the company’s second-biggest shareholder.

Subsea 7 SA gained 2.7 percent to 139.30 kroner. The provider of offshore oilfield services climbed to its highest price in more than three months in Oslo after winning a $600 million contract in West Africa that may lead to further orders from the region.

Spain Bailout

Spain will receive an emergency disbursement from the 100 billion-euro bailout set aside for its lenders because of restrictions that the European Central Bank has placed on bank borrowing, a person familiar with the matter said today.

Bankia SA had to abandon its plan to get a loan from the ECB last month after the latter placed limits on lending against government-guaranteed bonds. The lender will get the first tranche of aid soon, the person said.

Bankia jumped 17 percent to 1.40 euros. Banco Popular Espanol SA surged 15 percent to 1.72 euros.

Telekom Austria declined 5.6 percent to 6.94 euros as a gauge of telecommunications companies dropped. The mobile-phone operator predicted full-year revenue of 4.2 billion euros ($5.2 billion), compared with a forecast of 4.4 billion euros in June.

The phone company partly controlled by Carlos Slim’s America Movil SAB projected earnings before interest, depreciation and amortization of as much as 1.45 billion euros, compared with the previous estimate of 1.5 billion euros.

Vodafone Plc, the world’s second-largest mobile-phone company, lost 1.7 percent to 185.6 pence.

William Demant Holding A/S plunged 7.5 percent to 515 kroner after reporting first-half Ebit of 864 million kroner. That missed the median analyst estimate of 935 million kroner.

Lonmin Plc plunged 6.8 percent to 648 pence, dropping for a fourth day. The third-biggest platinum producer said Chief Executive Officer Ian Farmer had been hospitalized with a serious illness and the company may miss output targets as a strike cut production.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE