European stocks advanced as U.S. home prices and consumer confidence increased more than forecast, adding to signs the world’s largest economy is strengthening.
Lonza Group AG rose 3 percent amid reports of takeover speculation. Weir Group Plc climbed 4 percent as analysts said General Electric Co. may be interested in buying the mining-equipment maker. Continental AG sank 4 percent as Schaeffler AG sold a 10.4 percent stake in the tire producer. Infineon Technologies AG slid 6.1 percent after Europe’s second-biggest semiconductor maker forecast a decline in revenue.
The Stoxx Europe 600 Index added 0.4 percent to 275.78 at the close of trading. The gauge has rallied 18 percent from this year’s low on June 4 as European Central Bank policy makers agreed to implement an unlimited bond-buying program and the Federal Reserve unveiled a third round of asset purchases.
“The numbers are better than expected,” said Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva. “This should help counter the recent negative news and profit warnings from the likes of Caterpillar and Infineon.”
The S&P/Case-Shiller index of property values in 20 U.S. cities increased 1.2 percent in July from a year earlier, the biggest advance since August 2010. The median forecast of 24 economists surveyed by Bloomberg called for a 1.05 percent gain.
Confidence among U.S. consumers rallied to a seven-month high in September. The Conference Board’s index increased to 70.3 this month from 61.3 in August, exceeding the most optimistic projections of all economists in a Bloomberg survey.
National benchmark indexes rose in 12 of the 18 western European markets. Germany’s DAX added 0.2 percent and France’s CAC 40 increased 0.5 percent. The U.K.’s FTSE 100 Index gained 0.4 percent.
Greece’s ASE slipped 0.3 percent. The nation faces a financing gap that won’t be solved by budget measures being discussed because a weak economy and delayed privatizations have worsened its fiscal situation, International Monetary Fund Managing Director Christine Lagarde said at the Peterson Institute for International Economics in Washington yesterday.
Lonza, which produces chemicals and biotechnology products, jumped 3 percent to 51.10 Swiss francs. The Guardian and the Daily Mail reported that BASF SE and Saudi Basic Industries Corp. may be interested in buying the Swiss company, citing speculation among traders.
Weir Group climbed 4 percent to 1,811 pence, rising for the first time in four days. Analysts at Oriel Securities Ltd. and Investec Ltd. said GE will probably be drawn to Weir as the U.S. company looks to build its mining-equipment division through acquisitions.
Suedzucker AG gained 3.4 percent to 28.55 euros after the world’s largest sugar producer boosted its earnings forecast for the year.
Volvo AB advanced 4.2 percent to 95 kronor, the highest since April 3. The second-biggest truckmaker will restructure operations in Japan and the U.S. as it tries to boost margins amid softening global markets.
Daily Mail & General Trust Plc climbed 1.5 percent to 497.25 pence as the publisher of the U.K.’s Daily Mail and Mail on Sunday newspapers said full-year results will be in line with analysts’ forecasts. Today’s statement was “reassuring” and “very encouraging,” according to Numis Corp.
Continental fell 4 percent to 78.22 euros, the biggest drop in three months. Schaeffler, a German industrial bearings maker, sold a 10.4 percent stake in Continental for 1.6 billion euros ($2 billion) to reduce debt after a failed takeover.
A gauge of auto-industry shares dropped 1.3 percent for the biggest decline among the 19 industry groups in the Stoxx 600 as Goldman Sachs Group Inc. cut its profit estimates for Daimler AG, Volkswagen AG and Bayerische Motoren Werke AG.
Daimler fell 1.6 percent to 39.46 euros, VW lost 1.7 percent to 152.25 euros and BMW slid 1.4 percent to 58.81 euros.
Infineon tumbled 6.1 percent to 5.11 euros, the biggest retreat in nearly three months. The company predicted sales in the three months through December will decline as much as 10 percent from the previous quarter as clients cut spending amid the economic slowdown.
Telekom Austria AG, the phone company partly controlled by Carlos Slim’s America Movil SAB, plunged 7.2 percent to 5.70 euros, the lowest price since April 2001. The Vienna-based company cut its dividend forecast for this year to 0.05 euros a share from 0.38 euros.
Standard Chartered Plc declined 1.6 percent to 1,457.5 pence. The Financial Times said Temasek Holdings Pte talked to potential buyers for its stake in the lender, citing people it didn’t identify.
The Singapore investment company is the bank’s biggest shareholder, with an 18 percent holding, according to data compiled by Bloomberg. Gabriel Kwan, a Hong Kong-based spokeswoman for Standard Chartered, and Jeffrey Fang, a spokesman for Temasek, declined to comment.
Georg Fischer AG slumped 6.2 percent to 347.75 francs, its largest drop in four months. Vontobel Holding AG trimmed its recommendation on Europe’s biggest maker of iron castings for cars to reduce from buy.