European Stocks Climb After U.S. Jobs Data Beat Forecasts

European stocks rose, ending a five-day decline and rebounding from their lowest level since Oct. 14, after a U.S. jobs report showed employers added more workers than forecast in November.

Berkeley Group Holdings Plc surged to its highest since price at least 1989 after saying first-half profit rose 22 percent. London Stock Exchange Group Plc climbed 2.8 percent after Bank of America Corp.’s Merrill Lynch unit recommended buying the stock. Givaudan SA lost 2.1 percent after Nestle SA said it will sell $1.27 billion of shares in the world’s largest flavorings maker.

The Stoxx Europe 600 Index added 0.7 percent, the most since Nov. 14, to 316.50 at the close of trading in London. The gauge declined 2.7 percent this week. It’s still rallied 13 percent in 2013 as central banks around the world have pledged to keep interest rates low for a prolonged period of time.

“It’s a relief rally,” Neil Veitch, investment director at SVM Asset Management in Edinburgh, said by phone. “People were in this paradoxical situation where good news was bad news as investors became ever more concerned about Fed tapering. But at some point we have to take steps to normalize monetary policy. QE was a lifeboat after the financial crisis but with the economic recovery underway, it makes sense to pull back some of that stimulus.”

A Labor Department report in Washington showed U.S. employers added 203,000 workers last month following a revised 200,000 gain in October. The median economist estimate in a Bloomberg survey called for a 185,000 advance. The jobless rate fell to 7 percent in November, a five-year low. Economists had forecast the rate would fall to 7.2 percent.

Fed Stimulus

Investors are seeking to gauge when the Federal Reserve will reduce stimulus amid signs of an improving U.S. economy. Reports yesterday showed the annualized growth rate in the third quarter rose the most since the first three months of 2012, while jobless claims unexpectedly declined last week.

In a Bloomberg Global Poll Nov. 19, four of five investors said they expected the Fed to put off a decision to cut its $85 billion-a-month in bond buying until March 2014 or later. The Federal Open Market Committee next meets Dec. 17-18.

Out of the 17 western European markets open today, 12 benchmark indexes rose. The U.K.’s FTSE 100 gained 0.8 percent and France’s CAC 40 rose 0.7 percent. Germany’s DAX jumped 1 percent. Finland’s market is closed for Independence Day.

The Stoxx 600 retreated 3.3 percent in the past five days, posting its longest losing streak since June. The index fell 0.9 percent yesterday as European Central Bank President Mario Draghi said that financial-market developments and low domestic demand may hurt the euro area’s economy.

Berkeley, LSE

Berkeley Group jumped 11 percent to 2,537 pence. The U.K. housebuilder focused on London and the southeast said net income increased to 131 million pounds ($214 million) in the six months through October from 107.5 million pounds a year earlier. Berkeley declared an interim dividend of 90 pence a share.

Taylor Wimpey Plc rose 2.4 percent to 108.5 pence, and Persimmon Plc, U.K.’s largest housebuilder, advanced 2.5 percent to 1,183 pence.

LSE gained 2.8 percent to 1,626 pence. Bank of America raised its rating on the operator of Europe’s oldest independent bourse to a buy from neutral. The brokerage cited increasing evidence that LCH.Clearnet Group Ltd. its share of clearing and boosted its price estimate to 1,870 pence from 1,700 pence.

FirstGroup Plc added 5 percent to 116.6 pence. The rail company named John McFarlane as its chairman, effective Jan. 1. McFarlane, who is chairman of insurer Aviva Plc, will replace Martin Gilbert.

Givaudan, L’Oreal

Givaudan lost 2.1 percent to 1,210 Swiss francs. Nestle, the world’s largest food company, plans to sell all of its 926,562 Givaudan shares at yesterday’s closing price to institutional investors. The Nespresso coffee maker held a 10 percent stake as of Dec. 31, making it Givaudan’s second-biggest owner, according to data compiled by Bloomberg. Nestle rose 1.1 percent to 65.20 francs.

L’Oreal SA gained 3.6 percent to 126.80 euros. Nestle is the second-biggest investor in the French cosmetics maker and restrictions on selling its 29 percent stake will expire in April. Many analysts say Nestle will probably sell and exit about 22.4 billion euros ($29.5 billion) richer or simply maintain the position since the holding today generates about a 10th of its net income.

TNT Express NV lost 4.7 percent to 6.30 euros, the biggest drop since Jan. 14. PostNL NV, the Dutch mail service with operations in the U.K. and Germany, said it will sell about half of its 29.8 percent stake in the Dutch package-delivery company to reduce debt. The 15 percent stake up for sale is valued at about 540 million euros ($738 million), according to data compiled by Bloomberg. PostNL gained 1.9 percent to 4.18 euros.

(Corrects to remove reference to back-to-back payroll gains in fifth paragraph.)
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