Energy Shares Lead European Stocks to Biggest Rally in 6 Weeks

  • Cable & Wireless shares jump after Liberty Global deal
  • Euro falls for 3rd day, while oil holds above $40 a barrel

Oil-and-gas producers strengthened gains, leading an advance in European shares for a second day.

Total SA and Royal Dutch Shell Plc climbed 3.4 percent or more. France’s CAC 40 Index proved resilient in the wake of Friday’s terror attacks, rising 2.8 percent for the biggest gain in developed markets, after closing little changed yesterday.

Europe’s stocks advanced the most in six weeks, helped by a falling euro and oil prices that have held above $40 a barrel, according to Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. The Stoxx Europe 600 Index rose 2.5 percent at the close of trading, as 570 of its stocks rose.

“We always said that the weak euro is a tailwind for European companies,” said Sampere, whose firm manages about 250 million euros ($267 million). “I don’t think that investors who were under-invested because of the turmoil over the last months will want to miss a possible upside to the year-end.”

Germany’s DAX Index climbed 2.4 percent after data on the country’s investor confidence beat forecasts in November. Exporters gained, with Bayer AG and BMW AG up at least 2.7 percent, as the euro weakened to a seven-month low.

The European Central Bank sees a risk that investors and consumers will lose faith in policy makers’ projections for reviving inflation, Executive Board member Peter Praet said in an interview in Frankfurt.

Europe’s benchmark gauge is resuming a rally that had stalled earlier this month, after rebounding as much as 12 percent from a September low. It fluctuated yesterday as travel shares fell in the aftermath of terror attacks in Paris, before the rally in oil companies helped it close 0.3 percent higher.

Global investor sentiment toward the region’s equities is nearing record levels, with 58 percent of fund managers surveyed saying they own more euro-area shares than are represented in benchmarks, according to a Bank of America Merrill Lynch report.

Among shares active on corporate news, Cable & Wireless Communications Plc jumped 5.4 percent after Liberty Global Plc agreed to buy it. Genmab A/S surged 11 percent after a drug it’s developed with Johnson & Johnson won U.S. approval. That entitles Genmab to a $45 million payment from J&J. Randstad Holding NV rallied 6.9 percent after its sales rose in October.

EasyJet Plc lost 4.1 percent after its earnings missed the average analyst estimate in a Bloomberg survey.

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