- Credit Agricole jumps, may sell regional bank stakes
- Oil producers trim gains, paring Stoxx 600's advance
European stocks rose the most in three weeks amid optimism China will act to support its weakening economy.
The Stoxx Europe 600 Index climbed 1.3 percent at the close of trading. It rose as much as 2.4 percent earlier after a report showed China’s economy grew at an annual pace that was just shy of a government target, while leaving open the possibility of further stimulus. Europe’s benchmark pared its advance as oil-and-gas producers gave up some gains amid a drop in crude.
Concern over a slowdown in the world’s second-biggest economy and deepening oil losses have weighed on investor sentiment this year, dragging the Stoxx 600 down as much as 10 percent to its lowest level since December 2014.
“It looks like the hangover from this awful start to the year is finally clearing,” said Justin Urquhart Stewart, co-founder of Seven Investment Management in London. “The slowdown in China is nowhere near as bad as markets feared, plus officials have the ability to intervene and stimulate growth. Though sentiment is still rock bottom, valuations have been so squeezed that any sign of corporate health should help.”
The Stoxx 600 fell 21 percent from an April record through yesterday, after entering a bear market at the end of last week. That left its companies trading at 14.2 times estimated profit, near a one-year low.
Investors are also focusing on corporate earnings this week. Unilever added 3 percent after its quarterly revenue beat estimates. Software AG jumped 13 percent after posting annual operating profit that exceeded its forecasts.
RWE AG and EON SE jumped 7.6 percent or more after Germany deferred a debate on the country’s phase-out of coal-fired power. Prudential Plc rose 3.4 percent after the insurer disclosed details of its capital strength and named a new chief executive officer for the U.K. and Europe.
Credit Agricole SA climbed 2.5 percent after the lender seeking to bolster capital confirmed it’s exploring selling stakes in more than three dozen regional banks. Ocado Group Plc rallied 6.9 percent after the Daily Mail reported speculation that the online grocer will partner with Amazon.com Inc. in Britain.
Novozymes A/S tumbled 8.5 percent after the Danish biotechnology company abandoned an annual sales-growth target.