European stocks advanced the most in two weeks amid better-than-forecast U.S. economic reports and a rebound in Chinese manufacturing.
Etablissements Maurel & Prom led the rally, surging 8.3 percent after three people familiar with the matter said China Petrochemical Corp. is considering a takeover offer for the French oil explorer. British Sky Broadcasting Group Plc climbed 7.1 percent after first-quarter operating profit beat analyst estimates. Croda International Plc, the world’s second-largest maker of cosmetic ingredients, dropped 1.3 percent.
The Stoxx Europe 600 Index rose 1.3 percent to 273.7 at the close in London, its biggest gain since Oct. 16. The benchmark completed its fifth monthly rally yesterday and has surged 17 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.
“October is behind us and as the new month begins, market sentiment may get more positive again in terms of price action,” said Serge Berger, a Zurich-based trader at Blue Oak Advisors LLC. “With the U.S. earnings season mostly behind us, any news here such as today’s decent economic data should help support prices.”
Labor Department data showed fewer Americans than forecast filed first-time claims for unemployment insurance last week, while a private report based on payrolls showed U.S companies expanded payrolls in October by the most in eight months.
Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks, the official report showed. Economists had forecast 370,000. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman said.
Data from ADP Research Institute showed U.S. companies added 158,000 workers last month. The increase followed a revised 114,000 gain in September. This is the first ADP report derived using a larger sample and new methodology.
Consumer confidence in the U.S. climbed in October to the highest in more than four years. The Conference Board’s index increased to 72.2, the highest since February 2008, from a revised 68.4 in September. The figure was projected to rise to 73, according to the median estimate of economists.
Another report showed manufacturing in the world’s largest economy expanded at a faster pace than forecast. The Institute for Supply Management’s factory index climbed to 51.7 last month from 51.5 in September. A reading of 50 is the dividing line between expansion and contraction.
China’s manufacturing expanded for the first time in three months as output and new orders climbed, adding to signs growth in the world’s second-biggest economy is rebounding after a seven-quarter slowdown.
The Purchasing Managers’ Index climbed to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. A separate survey from HSBC Holdings Plc and Markit Economics increased to an eight-month high.
The number of shares changing hands in the Euro Stoxx 50 Index of the euro region’s biggest companies was 42 percent less than the 30-day average as many nations marked the All Saints’ Day holiday, according to data compiled by Bloomberg. Volumes for the U.K.’s FTSE 100 Index were 49 percent higher.
National benchmark indexes rose in 13 of the 16 western European markets that were open today. France’s CAC 40 and the U.K.’s FTSE 100 both climbed 1.4 percent. Germany’s DAX added 1 percent. Greece’s ASE slumped 5 percent, taking its losses over the last six days to 14 percent.
Maurel & Prom advanced 8.3 percent to 11.64 euros. China Petrochemical, also known as Sinopec Group, has held informal discussions with Maurel in the past year though hurdles to a deal remain, said two of the people familiar with the matter, who asked not to be identified as the deliberations are private. A deal could value Maurel at more than $2 billion, the people said.
BSkyB rallied 7.1 percent to 759 pence, the biggest increase since June 2010, after reporting an increase in fiscal first-quarter operating profit that beat analyst estimates as the U.K.’s biggest pay-television provider won customers for high-speed Web access.
Earnings before interest, taxes and other items rose 5.1 percent to 310 million pounds ($500 million) in the three months ended Sept. 30, the company said. Analysts in a Bloomberg survey had estimated 300 million pounds.
Lloyds Banking Group Plc jumped 8.3 percent to 43.94 pence, the highest price since July, 2011. Britain’s biggest mortgage lender said the amount it pays out each month to settle payment protection insurance claims fell to 250 million pounds in the third quarter from 300 million pounds in the second half.
Cie. Financiere Richemont SA, the owner of the Cartier brand, gained 4.9 percent to 63.35 Swiss francs after Bank of America Corp. raised the stock to buy from underperform.
Swatch Group AG, the world’s largest watchmaker, increased 4.8 percent to 403.90 francs. Christian Dior SA rose 3.3 percent to 114.45 euros, while LVMH Moet Hennessy Louis Vuitton SA advanced 2.6 percent to 128.60 euros.
BT Group Plc climbed 6.8 percent to 227 pence, the strongest rally since May 2010. The biggest fixed-line phone company in the U.K. kept its full-year profit target as cost cuts helped it avoid a drop in earnings for the latest quarter.
Croda declined 1.3 percent to 2,172 pence. The company posted a third-quarter continuing operating profit of 59.70 million pounds, missing the analyst estimate of 63.96 million. Chairman Martin Flower said he expects a similar performance in the fourth quarter as in the third quarter amid a weak market, particularly in Europe.
BG Group Plc, the U.K.’s third-largest natural-gas producer, dropped 4 percent to 1,102 pence. The stock extended yesterday’s biggest decline since at least September 1988, as analysts at Bank of America, Societe Generale SA and Macquarie Securities Ltd. lowered their recommendations. BG Group plunged 14 percent yesterday after saying project delays will hold back output growth next year.
National Bank of Greece SA plunged 12 percent to 1.58 euros and Alpha Bank SA slumped 11 percent to 1.60 euros after Mega TV reported that Michalis Kassis, a Greek Pasok lawmaker, said he won’t vote for austerity measures.