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European Stocks Climb Amid Debt-Crisis Talks

Aug. 27 (Bloomberg) -- European stocks rose as Germany’s Finance Minister Wolfgang Schaeuble said the continent’s two largest economies will create a working group to strengthen the euro area’s fiscal and monetary union.

Deutsche Bank AG and BNP Paribas SA both gained more than 2 percent. Nokia Oyj jumped 7.7 percent after a jury found rival Samsung Electronics Co. had violated Apple Inc. patents. Q-Cells SE surged 12 percent after South Korea’s Hanwha Group signed a deal to acquire the insolvent German company.

The Stoxx Europe 600 Index added 0.5 percent to 269.2 at the close, after earlier falling as much as 0.2 percent. The volume of shares changing hands on the equity benchmark was 64 percent lower than the average of the last 30 days, according to data compiled by Bloomberg, because the U.K. market was closed for a public holiday.

“Markets are more driven by political headlines than by fundamental news,” said Lex Van Dam, who manages $500 million at Hampstead Capital LLC in London. “It’s a very quiet market which is no surprise for a U.K. bank holiday. Real investors remain on the side lines.”

Schaeuble said today that Germany and France will seek to develop common proposals on a fiscal, banking and monetary union. He also told reporters, after meeting with French Finance Minister Pierre Moscovici in Berlin today, that the two countries will look for measures to boost economic growth.

Next month, the European Central Bank will formulate a bond-buying plan and representatives of Greece’s international creditors will issue a progress report. A German court will also announce its decision on the legality of the euro area’s proposed permanent bailout fund.

Jackson Hole

Investors are also awaiting a speech from Federal Reserve Chairman Ben S. Bernanke on Aug. 31 at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming. His speech in 2010 preceded a second round of bond purchasing, or quantitative easing, to help support the economic recovery.

Fed Bank of Chicago President Charles Evans today urged the central bank to begin a third round of asset buying. The Fed should buy bonds until the U.S. unemployment rate declines for at least six months, Evans said in a speech in Hong Kong today. Speculation that central banks will do more to bolster growth has helped drive up stocks and commodities, with the S&P 500 rallying 10 percent since June 1 and the Stoxx 600 climbing 15 percent from June 4.

“We are unlikely to get anything out of the Fed” this week, said Van Dam. “Consensus is still that if they print enough money, markets will continue to rise, but this is in no way a certainty.”

European Equities

National benchmark indexes gained in every Western-European market that opened today. France’s CAC 40 rose 0.9 percent and Spain’s IBEX 35 increased 1.2 percent. Germany’s DAX Index climbed 1.1 percent after a report showed business confidence fell less than some economists forecast.

A gauge of European banks climbed 0.8 percent as Spanish 10-year bonds rallied.

Deutsche Bank, Germany’s largest lender, gained 2.4 percent to 27.92 euros, while BNP Paribas climbed 2.1 percent to 34.90 euros in Paris.

Nokia surged 7.7 percent to 2.68 euros, for the biggest advance on the Stoxx 600, amid speculation the company’s sales will benefit if the U.S. bans some of Samsung’s mobile devices.

Samsung plummeted in Asian trading after a U.S. court on Aug. 24 ruled that the world’s biggest handset maker infringed six of seven Apple patents. A ban may undermine Samsung’s grip on the smartphone market and set a precedent for rival handset makers that use Google Inc.’s Android operating system.

Q-Cells Jumps

Q-Cells soared 12 percent to 19 euro cents. The shares surged as much as 40 percent after Hanwha agreed to buy the company that filed for insolvency in April. Hanwha, which signed a deal yesterday with Q-Cell’s administrator, Henning Schorisch, will assume “business liabilities in the low hundreds of millions” and a cash purchase price “in the medium double-digit million euro range.”

Spain’s Isofoton SA had said it would bid for Q-Cells at the beginning of this week. Q-Cells surged 33 percent on Aug. 24 following a report that Hanwha would buy the business.

Lundin Petroleum AB climbed 4.4 percent to 153.60 kronor after the Swedish oil company said it discovered a 25-meter oil column at an appraisal well in the northeastern part of Johan Sverdrup deposit, Norway’s largest oil find since 1974.

Statoil ASA also said today that its Geitungen prospect in the North Sea holds as much as 270 million barrels of oil. The shares increased 0.8 percent to 148.10 kroner.

ThyssenKrupp Gains

ThyssenKrupp AG rose 1.7 percent to 16.49 euros after Welt am Sonntag reported that Germany’s biggest steelmaker wants to sell plants in the U.S. and Brazil for at least their book value of 7 billion euros ($8.8 billion). The newspaper cited an interview with Chief Executive Officer Heinrich Hiesinger.

Several parties have shown interest in the assets and the company will wait to see what offers it receives, Welt am Sonntag reported. ThyssenKrupp will use the funds for investments and to pay down debt.

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

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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