European Stocks Rise as U.S. Jobless Claims Fall; Xstrata Rallies on Talks
European (SXXP) stocks climbed for a third day as a report showed that U.S. jobless claims dropped more than economists had estimated and Glencore International Plc held talks to buy Xstrata Plc (XTA), boosting mining companies.
Xstrata jumped 9.9 percent after confirming that Glencore made an approach about an offer for the coal, copper and nickel miner. Unilever dropped 4.4 percent as the world’s second- largest consumer-goods maker posted revenue growth that missed analysts’ estimates. AstraZeneca Plc (AZN) sank 3.4 percent after saying 2012 will be challenging for the industry
The Stoxx Europe 600 Index rose 0.2 percent to 260.11 at the close for the gauge’s highest level since Aug. 1. The benchmark measure swung between gains and losses at least 20 times earlier today.
“You have a lot of liquidity and strong companies with strong cash flows thinking valuations are strong right now,” said Virginie Maisonneuve, head of global equities at Schroder Investment Management Ltd., which oversees $284 billion. “We could see a wave of mergers and acquisitions, but it has to be at the right valuation. It has to be a marriage that makes sense. The good deals will go through.”
The Stoxx 600 rose 4 percent in January for its second consecutive month of gains. The gauge has rallied 21 percent from its lowest level last year as the European Central Bank boosted lending to banks and U.S. economic reports exceeded estimates.
National benchmark indexes climbed in 14 of the 18 western- European (SXXP) markets today. The U.K.’s FTSE 100 Index added 0.1 percent. France’s CAC 40 Index gained 0.3 percent and Germany’s DAX Index advanced 0.6 percent.
U.S. Jobless Benefits
In the U.S., a Labor Department report showed that applications for unemployment benefits fell last week more than economists had predicted, indicating the labor market is improving in the world’s largest economy.
Xstrata surged 9.9 percent to 1,230.5 pence after confirming that Glencore has held talks to buy the shares in the company that it doesn’t already own. That would add mines from Africa to Asia to the world’s largest listed commodity trader. Glencore has made an all-share offer, Zug, Switzerland-based Xstrata said today in a statement to the London Stock Exchange. Glencore already holds a 34 percent stake in Xstrata and the rest of the company is valued at 21.9 billion pounds ($35 billion) based on yesterday’s closing price.
Glencore’s shares soared 6.9 percent to 461.7 pence. The company said in a statement that there’s no certainty it will make an offer.
Novo Nordisk, Benetton
Novo Nordisk A/S (NOVOB) rose 4.3 percent to 709.50 kroner after the world’s largest insulin maker posted net income that climbed to 4.69 billion kroner ($830 million) from 3.95 billion kroner a year earlier. That exceeded the 4.06-billion kroner average estimate of 21 analysts surveyed by Bloomberg.
Benetton Group SpA (BEN) surged 17 percent to 4.74 euros after the Benetton family, the company’s largest shareholder, said it will offer 276.6 million euros ($364 million) for the shares it doesn’t already own in the company. Edizione Holding SpA, which owns 67 percent of Benetton, will offer 4.60 euros a share, it said in a statement last night on the Italian bourse.
Unilever dropped 4.4 percent to 1,994 pence as the maker of Hellmann’s mayonnaise and Lynx deodorants said it expects difficult economic conditions and elevated commodity costs to persist this year.
“We cannot recollect a more challenging year as 2011,” Chief Financial Officer Jean-Marc Huet said in a teleconference with reporters today. “The global economy is still in poor shape and we expect it to continue.”
AstraZeneca sank 3.4 percent to 2,984 pence after saying 2012 will be challenging for the industry. It’s guidance for this year was “disappointing,” according to Goldman Sachs Group Inc. analyst Keyur Parekh.
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