European Stocks Climb as Japan Opts for Stimulus
European stocks climbed, halting a two-day decline, after the Bank of Japan joined the Federal Reserve in opting for further asset purchases to support the economy and housing starts climbed in the U.S.
Porsche SE jumped 7.2 percent after a German court dismissed two lawsuits that claimed the carmaker lied about its plan to take over Volkswagen AG in 2008. Inditex SA (ITX) added 3.7 percent after the world’s largest clothing retailer reported better-than-estimated profit. Hannover Re slipped 1.2 percent as insurance companies declined across Europe.
The Stoxx Europe 600 (SXXP) Index rose 0.4 percent to 274.9 at the close, extending its rally from this year’s low on June 4 to 18 percent. The volume of shares changing hands in the Stoxx 600 companies was 16 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
“We are in this situation where all the central banks are clearly competing in some respects to ease more than the other ones,” said Stephen Cohen, managing director at BlackRock Inc.’s iShares unit, in an interview on Bloomberg Television. “Now it moves back towards the politicians; moves towards the structural challenges that have not been resolved. They exist everywhere.”
European stocks climbed after Japan’s central bank unexpectedly expanded its asset-purchase target by 10 trillion yen ($128 billion) as it seeks to avoid a contraction in the world’s third-largest economy.
The BOJ’s board enlarged the central bank’s easing program, in which it buys mainly government debt, to 55 trillion yen in a unanimous decision, according to a statement. The board left unchanged a separate facility that extends credit to banks at 25 trillion yen.
The benchmark Stoxx 600 climbed to a 15-month high last week after European Central Bank policy makers agreed to implement an unlimited bond-buying program and the Fed unveiled a third round of asset purchases.
National benchmark indexes advanced in 14 of the 18 western-European markets. Germany’s DAX added 0.6 percent, France’s CAC 40 gained 0.5 percent, and the U.K.’s FTSE 100 rose 0.4 percent.
Porsche jumped 7.2 percent to 46.30 euros after the Braunschweig Regional Court dismissed the lawsuits. Three additional suits are still spending.
Porsche has faced multiple legal challenges since it disclosed on Oct. 26, 2008 that it controlled 74.1 percent of VW, partly through options, and was seeking to take over the company. Porsche previously denied that it had such a plan. The announcement caused VW’s stock to surge as short sellers raced to buy shares borrowed in bets that VW would fall.
Inditex rose 3.7 percent to 95.31 euros after the owner of the Zara and Massimo Dutti chains reported a 32 percent jump in first-half net income to 944 million euros ($1.23 billion). The average estimate of 13 analysts compiled by Bloomberg had called for profit of 893.5 million euros. Sales for the six months through July gained 17 percent.
Heineken NV (HEIA) gained 6.4 percent to 45.55 euros after companies owned by Thai billionaire Charoen Sirivadhanabhakdi gave their support for the Dutch brewer’s $4.6 billion bid for Fraser & Neave Ltd.’s 40 percent stake in Asia Pacific Breweries Ltd. (APB)
Charoen’s Thai Beverage Pcl and TCC Assets Ltd. will back Heineken’s bid after Heineken, which runs APB in a venture, agreed not to make a competing offer for F&N.
A gauge of insurers posted the biggest decline of the 19 industry groups in the Stoxx 600. Hannover Re, the world’s fourth-biggest reinsurer, slid 1.2 percent to 50.53 euros. Ageas (AGS) lost 1.5 percent to 19.23 euros, while Spain’s Mapfre SA slid 1.9 percent to 2.11 euros.
ASML Holding NV (ASML), Europe’s largest chip-equipment maker, declined 3 percent to 42.12 euros after Kyunghyang Shinmun, a South Korean newspaper, reported that Samsung Electronics Co. may cut back on investment in 2013, increasing concern that the chip industry will slow down.
A Samsung spokesman said the company, which is the world’s largest seller of mobile phones and televisions, has yet to make a decision on its investment plans for next year.
Zodiac Aerospace (ZC) dropped 2.7 percent to 79.75 euros, its biggest slide in eight weeks, as the company, which makes seats and other equipment for airplanes, predicted late yesterday a full-year operating margin of 14 percent. That compared with an April forecast for at least 14 percent. Deutsche Bank AG downgraded the shares to hold from buy.
The Greek government will receive a 30 percent royalty on gross profit from certain games through Oct. 12, 2020.
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