European stocks climbed the most in almost four weeks as companies from Munich Re to BP Plc beat earnings estimates and a measure of euro-area services output shrank less than forecast.
Munich Re rose the most since July after the world’s biggest reinsurer said it will increase its dividend for 2012. Virgin Media Inc. surged to a record price after confirming it held talks with Liberty Global Inc. Royal KPN NV retreated the most in more than 11 years after saying it will sell 4 billion euros ($5.4 billion) of shares.
The Stoxx Europe 600 Index gained 0.6 percent to 285.56 at the close in London. European stocks dropped the most since Oct. 23 yesterday amid signs the region’s debt crisis will deepen. The benchmark has gained 2.1 percent this year, and is trading at 12.2 times its companies’ estimated earnings, up from 9.8 times in June, according to data compiled by Bloomberg.
“The reporting season so far in the U.S. and in Europe has generally been good, expectations have been beaten, and commentary about the year ahead has been more upbeat than people had expected,” Matthew Beesley, who helps oversee $3 billion of assets as head of global equities at Henderson Global Investors Holdings Ltd. in London, said in a Bloomberg Television interview with Mark Barton. “Yesterday was just an excuse to sell off, markets were looking for a reason to take profit.”
National benchmark indexes rose in 15 of the 18 western European markets. The U.K.’s FTSE 100 gained 0.6 percent and France’s CAC 40 jumped 1 percent. Germany’s DAX advanced 0.4 percent.
An index based on a survey of purchasing managers in the services industry of the 17 countries that use the euro rose to 48.6 in January from 47.8 in December, Markit Economics said in a report today. The London-based research company had initially estimated a reading of 48.3 for the measure. A reading below 50 means that activity contracted.
About 55 percent of the 151 western European companies that have reported earnings since Jan. 8 beat analysts’ projections for profit, according to Bloomberg data. Of the 177 that have posted sales, 54 percent exceeded forecasts.
Munich Re rose 3.9 percent to 138.95 euros after saying it will increase its dividend for 2012 to 7 euros a share from 6.25 euros. The company also reported preliminary net income of 480 million euros, beating the 448.3 million-euro average estimate of 10 analysts surveyed by Bloomberg. It made a profit of 627 million euros a year earlier.
BP Plc added 1.4 percent to 468.7 pence. Europe’s second-largest oil producer reported earnings adjusted for one-off items and changes in inventory of $4 billion, more than the $3.7 billion average estimate of 16 analysts surveyed by Bloomberg.
BG Group Plc advanced 3.4 percent to 1,142 pence, rebounding from an earlier slide of as much as 3.4 percent. Chief Executive Officer Chris Finlayson, who started his role in January, delivered a “very good performance” in the U.K. oil and gas company’s quarterly results presentation today, Jason Kenney, an analyst at Banco Santander SA in London, wrote in a note to clients.
Virgin Media climbed 17 percent to 2,889 pence, the biggest rally since its London listing in Oct. 2009. The U.K.’s second-largest pay-television provider didn’t provide details of its talks with Liberty Media. The Financial Times reported today that the cable-TV business owned by John Malone will soon make a bid for Virgin Media. The company, whose shareholders include Richard Branson’s Virgin Group, reports fourth-quarter results tomorrow.
Alfa Laval AB jumped 4.7 percent to 143.80 kronor, the biggest gain in 4 1/2 months. The world’s largest maker of heat exchangers said fourth-quarter profit fell to 895 million kronor ($141 million), from 928 million kronor a year earlier, exceeding the 877 million-krona average of 13 analyst estimates compiled by Bloomberg.
ARM Holdings Plc gained 4.4 percent to 931 pence, its highest price in almost 13 years. The designer of chips for Apple Inc.’s iPhone and iPad said revenue in the fourth quarter rose 19 percent to 164.2 million pounds ($257 million). The median estimate of analysts surveyed by Bloomberg had called for 152.4 million pounds.
KPN slumped 16 percent to 3.45 euros after the biggest phone company in the Netherlands posted a fourth-quarter net loss of 162 million euros. The average estimate of eight analysts compiled by Bloomberg had predicted a profit of 362 million euros. KPN spent 1.35 billion euros at an auction of wireless spectrum during the quarter.
Tele2 AB plunged 10 percent to 102.90 kronor, the biggest decline since May 2011. The Stockholm-based telecommunications company posted fourth-quarter net income of 565 million kronor, compared with the average analyst estimate of 1.17 billion kronor. The profit margin in the company’s Russian business, which accounts for 30 percent of sales, may fall this year, Chief Executive Officer Mats Granryd said.
The volume of shares changing hands in companies listed on the Stoxx 600 was 9.1 percent greater than the average over the past 30 days, according to data compiled by Bloomberg.