European Stocks Rise for Third Day on Economy; Unibail, Vestas Lead Gains
European stocks climbed for a third day as unexpected growth in the region’s manufacturing and services industries and rising U.K. retail sales eased concern that the economic recovery may be faltering.
Unibail-Rodamco SE led real-estate shares higher after unveiling an investor-payout plan. Vestas Wind Systems A/S rallied 3.8 percent as the world’s largest maker of wind turbines won its biggest order for a single electricity- generation site. Capita Group Plc surged the most in two months after saying it aims to win more government contracts as the U.K. trims costs.
The Stoxx Europe 600 Index climbed 2.1 percent to 254.37 at the 4:30 p.m. close of trading in London, as all 19 industry groups advanced. The gauge has still retreated 6.5 percent from this year’s high on April 15 amid concern that austerity measures from indebted European governments will harm the economic recovery.
“The PMI manufacturing data showed that we’re making some progress, giving the market a bit of hope,” said Markus Wallner, senior equity strategist at Commerzbank AG in Frankfurt. “We don’t see any double dip in the future. The Germany economy is leading the European economy forward.”
A composite index based on a survey of euro-area services and manufacturing purchasing managers increased to 56.7 in July from 56 last month, Markit Economics said today. Economists had projected a drop to 55.5, according to a Bloomberg survey. A reading above 50 indicates expansion.
Germany, U.K. Economies
A gauge of German manufacturing also unexpectedly gained this month. U.K. retail sales rose more than economists forecast in June as the World Cup soccer tournament stoked purchases at electrical goods shops and department stores. In the U.S., sales of previously owned homes fell less than forecast last month, according to the National Association of Realtors.
U.S. companies from United Parcel Service Inc. to Caterpillar Inc. and AT&T Inc. raised their profit forecasts today. More than 80 percent of S&P 500 companies that have reported results since July 12 have beaten analysts’ per-share earnings estimates, Bloomberg data show.
National benchmark indexes rose in all 18 western European markets. The U.K.’s FTSE 100 rose 1.9 percent, Germany’s DAX advanced 2.5 percent and France’s CAC 40 increased 3.1 percent.
Greece’s ASE Index jumped 2.7 percent as EFG Eurobank Ergasias SA and Alpha Bank SA, Greece’s second-biggest and third-biggest lenders, soared more than 7 percent.
Unibail-Rodamco surged 5.4 percent to 147.70 euros, pulling a measure of real-estate shares 2.7 percent higher. Europe’s largest publicly traded real-estate company announced a plan to distribute 1.8 billion euros ($2.3 billion) to investors.
Vestas climbed 3.8 percent to 290.5 kroner. The Danish company said it will supply 190 turbines of its V90-3.0 megawatt model to Terra-Gen Power LLC’s Alta Wind Energy Center near Tehachapi in California.
Capita rallied 3.8 percent to 737 pence, the biggest gain since May 12. Chief Executive Officer Paul Pindar said the company that provides a criminal records service for the U.K. Home Office aims to win more public-sector contracts next year as the government trims costs.
ABB Ltd., the world’s largest builder of electricity networks, advanced 4.2 percent to 20.48 Swiss francs. The Zurich-based company forecast a recovery in demand in the power business after reporting better-than-expected second-quarter profit and rising orders.
Technip SA jumped 7.4 percent to 52.07 euros after Europe’s second-largest oilfield-services provider reported a growing order backlog as it won contracts in Brazil and the North Sea.
European banking shares rose 3.2 percent for the second- biggest group increase in the Stoxx 600 before European Union regulators release the results of stress tests tomorrow.
The EU is examining the strength of 91 banks to determine if they can survive potential losses from both a recession and a decline in the value of their government-bond holdings. Bank of Ireland Plc climbed 4.1 percent to 72.9 euro cents as a person with direct knowledge of the matter said the bank is set to pass the tests.
Dexia SA surged 3.8 percent to 3.31 euros, while KBC Groep NV rose 2.5 percent to 33.27 euros. The two banks will pass the even under an adverse test scenario, ING Groep NV analysts said.
Swedbank AB rose 2.2 percent to 79.7 kronor. The largest bank in the Baltic countries said all Nordic lenders should pass the stress tests after it reported a second consecutive quarterly profit.
Nokia Oyj, the world’s largest mobile-phone maker, rose 2.6 percent to 7.17 euros, the biggest gain since May 10. Chief Executive Officer Olli-Pekka Kallasvuo said its new N8 handset will “kick-start” its comeback as second-quarter profit tumbled on competition from Apple Inc.’s iPhone.
Syngenta AG slid 5.3 percent to 229.3 Swiss francs after the world’s biggest maker of agriculture chemicals said first- half net income declined 11 percent to $1.25 billion, falling short of the $1.38 billion predicted by analysts in a Bloomberg survey. The company abandoned a target for earnings growth this year after burgeoning inventories of fungicides and crop-care products in North America hurt pricing.
Autonomy Corp., the UK’s second-largest software company, plunged 9.1 percent to 1,649 pence, the biggest drop since November 2008. Second-quarter gross margins declined to 86 percent from 88 percent a year earlier, the company said.
‘Failed to Grow’
“We estimate that after adjusting for one-offs, Autonomy failed to grow its core business,” said Paul Morland, an analyst at KBC Peel Hunt. “Margins were well below expectations.”
SSAB Svenskt Staal AB, the largest supplier of high-tensile steel, slid 7.1 percent to 108.4 kronor after earnings missed estimates. Second-quarter net income of 369 million kronor ($49.9 million), missing the 482 million-krona average estimate in a survey compiled by Bloomberg.
Outokumpu Oyj sank 6.3 percent to 12.86 euros after the Finnish stainless-steel maker forecast “somewhat negative” results in the third quarter.
BioMerieux SA tumbled 9.4 percent to 81.28 euros, the biggest decline since at least 2004. The maker of tests for HIV and hepatitis cut its full-year sales growth target to 6 percent from a previous forecast of around 7 percent. Oddo & Cie. downgraded the stock to “reduce” from “add.”