Surge in Lenders Pushes European Stocks Higher for a Fifth Day

Stoxx Europe 600 Index Adds 0.6 Percent
  • Banks, miners and carmakers lead gains, as oil stocks rebound
  • `Some anticipation' of dovish ECB meeting: Bankhaus Lampe

The biggest five-day surge in banks since 2011 pushed European stocks to a one-month high on speculation this year’s rout was overdone.

Lenders and carmakers, after suffering the most during the recent market tumble, were among the biggest gainers of the 19 industry groups on the Stoxx Europe 600 Index. Energy companies recovered from an early loss.

The Stoxx 600 rose 0.7 percent to 340.97 at the close of trading. The equity benchmark fell as much as 0.2 percent in afternoon trading before resuming gains as oil rebounded. It closed above its 50-day moving average yesterday, capping its longest winning streak since October as U.S. manufacturing data beat forecasts. Since slumping to a 2013 low on Feb. 11, it has rebounded 12 percent amid rallies in banks, automakers, miners and energy.

“We’ve seen some macro data which at least didn’t disappoint,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf. “There is some anticipation among investors on a dovish ECB meeting. If there is no disappointment in the economic data this week then the current rebound could go further.”

U.S. data will be in focus this week, with the Federal Reserve’s Beige Book and a release on nonfarm payrolls in the spotlight for indications of the health of the world’s biggest economy. A measure of private payrolls beat forecasts today. Investors also await direction on monetary policies later this month, with the European Central Bank scheduled to announced its decision on March 10, followed by the Fed on March 16. In January, ECB President Mario Draghi signaled the central bank may add further stimulus as soon as March.

Concern over global-growth prospects, the efficacy of central-bank stimulus, a deepening oil rout and bad loans at banks damped investor sentiment earlier this year, dragging the Stoxx 600 into a bear market.

Spain’s IBEX 35 Index jumped 1.8 percent today as Socialist leader Pedro Sanchez takes a first crack at winning a confidence vote later in a bid to form a government following December’s inconclusive election result. His attempt is seen as most likely to be rejected by the country’s 350-strong chamber of deputies.

Greece’s ASE Index rose the most among western-European markets with a 3 percent gain. Switzerland’s SMI Index advanced 1 percent as better-than-forecast data showed the Alpine nation’s economy returned to growth at the end of last year.

A gauge of miners extended its run as the best-performing group on the Stoxx 600 this year. ArcelorMittal and Anglo American Plc led gains with advances of at least 6.7 percent as industrial metals rose.

Greece’s Eurobank Ergasias SA led lenders higher, jumping 14 percent. Portugal’s Banco Comercial Portugues SA added 11 percent. Gains were also shored up by Italy’s Banco Popolare SC, which rose 7.1 percent.

Among stocks moving on corporate news, MorphoSys AG climbed 11 percent after reporting better-than-estimated 2015 earnings. Virgin Money Holdings (UK) Plc jumped 7 percent after posting a fourfold increase in pretax profit for last year. Amec Foster Wheeler Plc gained 9.8 percent after the oil engineering company refinanced its debt.

Luxottica Group SpA fell 4.7 percent after the maker of Ray-Ban sunglasses curbed its earnings growth outlook as it invests more than 1.5 billion euros ($1.6 billion) to revitalize and expand its business. Elekta AB tumbled 15 percent after the Swedish maker of medical devices reported earnings that missed estimates.

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