European Stocks Advance as U.S. Retail Sales Increase
European (SXXP) stocks advanced, with the Stoxx Europe 600 Index climbing to the highest since July 26, as reports showed German investor confidence in March increased more than forecast and American retail sales rose in February.
Raiffeisen Bank International AG (RBI) and UniCredit SpA (UCG) led lenders higher. Eramet SA, the operator of the world’s biggest ferro-nickel plant, gained with metal prices. Antofagasta Plc (ANTO) fell after full-year profit missed analysts’ estimates.
The Stoxx 600 (SXXP) added 1.8 percent to 269.56 at the close, after euro-area finance ministers signed off on a second bailout for Greece. The benchmark index has rallied 10 percent so far this year.
“The sky is brightening,” said Jerome Forneris, who helps manage $11 billion at Banque Martin Maurel in Marseille. “There have been some very good economic indicators in northern Europe. We hope that Germany will lead other countries higher. The U.S. economy is improving and that is helping the market. The stress from the sovereign-debt crisis that weighed on stocks is disappearing. The appetite for stocks has returned.”
In Germany, the ZEW Center for European (SXXP) Economic Research in Mannheim said its index of investor and analyst expectations, which seeks to predict economic developments six months in advance, rose to 22.3 from 5.4 in February. That’s the fourth straight increase. Economists forecast a gain to 10, according to the median of 36 estimates in a Bloomberg News survey.
American Retail Sales
Retail sales in the U.S. rose in February by the most in five months, reflecting broad-based gains that indicate the world’s largest economy is picking up.
The 1.1 percent advance matched the median forecast of 81 economists surveyed by Bloomberg News and followed a 0.6 percent increase in January that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand improved in 11 of 13 industry categories, including auto dealers and clothing stores.
The Federal Reserve will announce its rate decision at 2:15 p.m. in Washington. Policy makers will probably refrain from further action to boost economic growth as they assess recent data, estimates show. In a testimony before Congress on Feb. 29, Fed Chairman Ben S. Bernanke said maintaining monetary stimulus is warranted even as the unemployment rate falls.
The Wall Street Journal last week reported the Fed is considering a strategy that would allow it to undertake another round of bond buying, while lowering the risk of inflation.
National benchmark indexes rose in all of the 18 western European markets. France’s CAC 40 climbed 1.7 percent and Germany’s DAX added 1.4 percent. The U.K.’s FTSE 100 rose 1.1 percent.
Euro-area finance ministers cleared a second rescue of Greece, paving the way for the first payment from the 130 billion-euro package ($170 billion) to be made this month. Officials will give a formal approval on March 14, a day before the International Monetary Fund board votes on its contribution.
The agreement caps months of grueling negotiations between Greece, the IMF and euro-area authorities. To win the latest aid package, Greece had to agree to deep budget cuts and complete the world’s largest-ever sovereign debt restructuring.
At the Brussels meeting yesterday, euro-area finance ministers asked Spain (EHBBESY) to prune an additional 0.5 percent of gross domestic product out of the 2012 budget. The call came ten days after new Prime Minister Mariano Rajoy unilaterally raised the Spanish deficit target for this year.
A gauge of European bank shares rose 3.3 percent for the best performance among the 19 industry group on the Stoxx 600.
Raiffeisen, eastern Europe’s third-biggest lender, advanced 1.4 percent to 25.20 euros. Western-European lenders such as UniCredit and Erste Group Bank AG are maintaining support for units in the region’s east even as they steer them toward local funding because of new capital rules, Fitch Ratings said.
UniCredit advanced 3.9 percent to 4.05 euros. Italy’s largest lender was raised to outperform from neutral at Exane BNP Paribas, which said it is “less concerned” about the risk of any more worsening of the bank’s Italian loan book.
3i Group Plc (III), the U.K.’s largest publicly traded buyout firm, soared 6.9 percent to 210 pence after a report in the Guardian cited speculation of a management buyout.
Tod’s, Marine Harvest
Tod’s SpA (TOD), the Italian owner of the Hogan brand, jumped 7.2 percent to 84.45 euros. The company reported a 20 percent increase in 2011 earnings before interest, taxes, depreciation and amortization to 232.4 million euros, compared with the average analyst estimate for 230.7 million euros. The company raised its dividend 25 percent to 2.5 euros per share.
Marine Harvest ASA (MHG), the world’s biggest salmon farmer, climbed 3 percent to 3.12 kroner. Nordea Bank AB upgraded the stock to hold from sell.
Eramet jumped 6 percent to 113.70 euros. Vedanta Resources Plc climbed 4.5 percent to 1,430 pence. Copper, lead, nickel and tin were among metals prices rising in London.
A British house-price index rose to a 19-month high in February as first-time buyers moved to beat the expiration of a property-tax exemption, according to the Royal Institution of Chartered Surveyors.
Barratt, Taylor Wimpey
Barratt Developments Plc advanced 5.3 percent to 149.3 pence. Taylor Wimpey Plc rallied 4.3 percent to 52.1 pence. Bovis Homes Group Plc added 2.7 percent to 516 pence.
Inchcape Plc (INCH), a U.K. auto dealer and distributor operating in 26 countries, surged 11 percent to 418.2 pence, the biggest increase since July 2009, after reporting full-year pretax profit that beat estimates.
Antofagasta Plc dropped 2.3 percent to 1,241 pence. The copper company, whose chief executive officer resigned last week, said profit increased 18 percent last year as output and prices climbed.
Net income rose to $1.24 billion from $1.05 billion a year earlier, the company said. That missed the $1.26 billion average estimate of eight analysts surveyed by Bloomberg. The dividend fell to 44 cents a share, including a 24-cent special payment, from $1.16 with a $1 special payment.
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