European Stocks Rally as Greek Lawmakers Pass Austerity Package
European stocks rallied the most in two months as Greek lawmakers passed a package of austerity measures needed to avoid default.
National Bank of Greece SA (ETE) led the country’s lenders higher. Allianz SE (ALV), Nobel Biocare AG and Wacker Chemie AG (WCH) gained more than 2.5 percent as analysts upgraded their recommendations on the shares. Meyer Burger Technology Ltd. rallied 4 percent after winning a contract. Salvatore Ferragamo SpA surged 7.2 percent on its first day of trading.
The Stoxx Europe 600 Index rose 1.5 percent to 269.19 at 2:19 p.m. in London for the biggest gain since April 20. The gauge has still tumbled 7.5 percent from its peak this year on Feb. 17 as investors speculated that Greece will fail to repay all its debt. The drop left the measure trading at the cheapest valuation compared with reported profits since 2008 last week, according to data compiled by Bloomberg.
The plan “is a good one,” said Pierre Mouton, a fund manager at Notz Stucki & Cie. in Geneva, who helps oversee $7 billion. “This gives investors a bit of optimism and allows us to concentrate more on companies and earnings instead of the geopolitical environment. Earnings season will start soon and results will be pretty good.”
Alcoa Inc., the largest aluminum producer in America, will unofficially kick off the second-quarter U.S. earnings season on July 11. Profits at S&P 500 companies will gain 13 percent in the second quarter and 20 percent in 2011 from the year-earlier periods, according to analyst estimates compiled by Bloomberg.
Greek Prime Minister George Papandreou won approval of his 78 billion-euro ($112 billion) package of budget cuts and asset sales today. A total of 155 lawmakers in the 300-strong chamber supported the law, with 138 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV.
Greek Prime Minister George Papandreou garnered the support of at least 151 lawmakers in a vote to approve the government’s 78 billion euro package of budget cuts and state asset sales, according to a tally of votes in the parliament in Athens today.
The measures are required for the country to secure a fifth loan payment from last year’s 110 billion-euro rescue by the European Union and International Monetary Fund.
National Bank of Greece, the nation’s largest lender, soared 4.1 percent to 5.10 euros. Alpha Bank SA surged 6.1 percent to 3.63 euros. Greece’s ASE Index added 2.3 percent.
Allianz, Europe’s biggest insurer, increased 3.2 percent to 94.99 euros as the stock was upgraded to “overweight” from “equal weight” at Morgan Stanley.
Nobel Biocare, the second-largest maker of dental implants by sales, climbed 2.5 percent to 16.93 Swiss francs as UBS AG upgraded the shares to “buy” from “neutral.”
Wacker Chemie advanced 2.7 percent to 148.60 euros after also being boosted to “buy” from “neutral” at UBS
Meyer Burger surged 4 percent to 36.4 francs. The company said it won a contract worth 160 million francs from GCL-Poly Energy Holdings Ltd. to supply high-precision wire saws and wafer inspection systems.
Ferragamo jumped 7.2 percent to 9.65 euros as the Italian luxury shoemaker’s debuted on the Milan exchange after raising 344.5 million euros in an initial public offering.
Charter International Plc (CHTR), an engineering company, soared 27 percent to 782 pence as Melrose Plc (MRO) said it made a preliminary approach about a possible 1.3 billion-pound ($2 billion) takeover offer.
Melrose added 3 percent to 355 pence.
Mining Companies Advance
A gauge of basic-resource shares in the Stoxx 600 climbed to a four-week high as metal prices rose. Eramet (ERA) SA, operator of the world’s largest ferronickel smelter, added 5.7 percent to 223.50 euros. Outokumpu Oyj (OUT1V), a Finnish steelmaker, increased 4.1 percent to 8.86 euros.
Antofagasta Plc (ANTO) climbed 4.5 percent to 1,362 pence. The copper producer controlled by Chile’s Luksic family sees “huge demand” for metals as China and other emerging markets invest in infrastructure and urbanization, Chief Executive Officer Jean Paul Luksic said in an interview in London.
Ipsos (IPS) SA rallied 4.1 percent to 32.88 euros as Aegis Group Plc (AGS), a U.K. buyer of advertising space, said Ipsos is the only company it’s talking to about a sale of its Synovate market- research unit. Aegis advanced 0.8 percent to 158.9 pence.
Senior Plc (SNR), a U.K. maker of air ducts for Boeing Co. and Airbus SAS planes, jumped 9 percent to 177.1 pence after saying pretax profit this year will exceed its forecasts.
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