European stocks gained, after the Stoxx Europe 600 Index dropped the most in more than five weeks yesterday, as a gauge of mining companies climbed, outweighing losses by airlines.
A.P. Moeller-Maersk A/S rallied the most in 4 1/2 years after predicting that its Maersk Line subsidiary will post better full-year profit than last year’s $461 million as it cuts costs. An index of European mining stocks posted its sixth consecutive weekly advance after precious metals jumped in late trading yesterday. Deutsche Lufthansa AG lost 1.3 percent as Morgan Stanley downgraded the stock.
The Stoxx 600 added 0.3 percent to 306.36 at the 4:30 p.m. close in London, dragging the gauge to a 0.1 percent advance this week. The equity benchmark slid 1.1 percent yesterday as better-than-forecast U.S. jobless claims fueled speculation that the Federal Reserve will soon taper its bond-buying program.
“It does feel like the U.S. economy is gaining a bit of momentum,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth-management unit. “Investors have been trying to decide whether good news is bad news. There must be a lot of institutional money sitting on some very fat profits year-to-date, and a lot of them may feel it is prudent to trim those profits as tapering becomes a reality. What might freak the markets out now is the pace of tapering.”
The Stoxx 600 rose to a 12-week high on Aug. 14 as a report showed the euro area’s economy returned to growth in the three months through June after six consecutive quarters of contraction. The equity benchmark has rallied 11 percent since reaching a low on June 24 as central banks signaled interest rates will remain low for an extended period.
In the U.S., a Commerce Department report showed that housing starts rose to an annualized rate of 896,000 in July. Economists surveyed by Bloomberg had predicted a rate of 900,000. In a sign construction activity will increase, building permits climbed to a 943,000 rate from 918,000 in June.
A separate release showed a gauge of consumer sentiment in the world’s largest economy unexpectedly declined in August. The preliminary reading of the Thomson Reuters/University of Michigan index fell to 80 from 85.1 in July, missing the 85.2 median estimate of economists surveyed by Bloomberg.
National benchmark indexes climbed in 12 of the 18 western-European markets today as trading resumed in Italy, Greece, Austria, Cyprus and Luxembourg following a public holiday. Germany’s DAX rose 0.2 percent and the U.K.’s FTSE 100 gained 0.3 percent. France’s CAC 40 added 0.8 percent.
Maersk’s B-shares surged 9.7 percent to 49,080 kroner. The group will probably post full-year net income of $3.5 billion, excluding impairment losses and divestment gains, it said in a statement today. That compares with the company’s previous forecast of $2.9 billion.
Fresnillo Plc, which mines precious metals, added 4.2 percent to 1,172 pence and Randgold Resources Ltd. rallied 5.3 percent to 5,150 pence after gold surged to its highest price in almost two months and silver jumped to a three-month high after the close of European trading yesterday.
Italian lenders rose as the premium investors require to buy the country’s 10-year bonds instead of German bunds fell to the lowest level since July 2011. Intesa Sanpaolo SpA rose 6.4 percent to 1.60 euros, while Banca Popolare di Milano Scrl advanced 3.6 percent to 42.1 euro cents.
Opera Software ASA jumped 13 percent to 54 kroner, the highest price since its initial public offering in 2004, after predicting earnings before interest and taxes of $58 million to $64 million for the full year. The Norwegian maker of Internet browsers had forecast $52 million to $62 million. The company still posted earnings per share for the second quarter that missed analysts’ estimates.
Lufthansa retreated 1.3 percent to 14.20 euros. Morgan Stanley lowered its rating on the shares to equal weight from overweight, meaning investors should not buy more of the stock. The brokerage reduced its forecasts for the airline in 2013 because of weak markets in Asia and the Middle East.
Ryanair Holdings Plc declined 1.5 percent to 6.64 euros in Dublin trading.
Telekom Austria AG slid 2.7 percent to 5.57 euros after Format reported that the company may sell 1 billion euros ($1.3 billion) of new equity. Shareholder America Movil SAB wants to use the capital increase to fund investments, according to the magazine, which didn’t say how it got the information. Telekom Austria spokesman Peter Schiefer said the company does not need to sell new shares.