European Stocks Rise as U.K. Avoids Triple-Dip Recession
European stocks advanced for a fifth day, their longest rally this year, as data showed the U.K. avoided a triple-dip recession and as companies including British American Tobacco Plc (BATS) reported results.
BAT gained 1.2 percent after first-quarter sales surpassed projections. Vodafone (VOD) Group Plc climbed to an 11-year high after a report Verizon Communications Inc. may bid $100 billion for full control of Verizon Wireless. Unilever fell 3 percent after posting sales growth that missed projections.
The Stoxx Europe 600 Index added 0.8 percent to 296.88 at the close, its highest price since April 2. The measure has rallied 4.1 percent so far this week as company earnings beat forecasts and investors speculated the European Central Bank will cut interest rates. It has advanced 6.2 percent so far this year.
“The U.K. GDP numbers were somewhat better than feared and at least contributed to alleviate concern about a new recession in the U.K.,” said Espen Furnes, a fund manager who helps oversee $75 billion at Storebrand Asset Management in Oslo. “The European (SXXP) earnings season so far has been a mixed bag. The comments on outlook have been muted but not outright negative. The markets see this as a temporary pause and expect an upswing in earnings in the second half.”
Britain avoided a triple-dip recession as the economy expanded more than forecast. Gross domestic product rose 0.3 percent in the first quarter after contracting 0.3 percent in the previous quarter, the Office for National Statistics said. The median estimate of economists in a Bloomberg survey had called for a 0.1 percent gain.
BAT climbed 1.2 percent to 3,591 pence. Europe’s largest cigarette maker said first-quarter sales excluding currency swings rose 5 percent. That beat the 3.7 percent average estimate of analysts surveyed by Bloomberg.
Vodafone added 1.7 percent to 196.4 pence after Reuters reported that Verizon has hired advisers to prepare a possible $100 billion cash-and-stock offer to buy out Vodafone’s stake in Verizon Wireless. Brenda Raney, a spokeswoman for Verizon Wireless, declined to comment to Bloomberg News.
Nobel Biocare (NOBN) Holding AG jumped 13 percent to 10.70 Swiss francs, its largest increase since October 2011. The world’s second-biggest maker of dental implants posted first-quarter net income of 13.3 million euros, exceeding the 11.7 million euros projected by analysts in a Bloomberg survey.
Straumann Holding AG, the largest dental-implants maker, advanced 3.6 percent to 123 francs.
Elementis Plc rose 5.9 percent to 261.9 pence, for the biggest increase since February, as the company said sales of specialty products grew 7 percent in the first quarter.
“In the first three months of 2013 we have made a solid start to the year,” the British specialty-chemical maker said in a statement.
Technip SA climbed 5.6 percent to 83.47 euros as Europe’s second-largest oilfield-services provider said its contract backlog rose to a record 14.8 billion euros at the end of the first quarter, a 20 percent gain from the year-earlier period.
Unilever fell 3 percent to 2,760 pence in London after the world’s second-biggest consumer-goods company reported the slowest quarterly revenue growth in two years. So-called underlying sales, which exclude acquisitions, disposals and currency swings, rose 4.9 percent in the first quarter from a year earlier. The median analyst estimate had projected a gain of 5.5 percent.
Banco Santander SA retreated 2.4 percent to 5.49 euros after Spain’s biggest lender reported first-quarter net income of 1.21 billion euros, missing the 1.31 billion-euro average estimate of analysts.
Royal KPN NV slid 6.8 percent to 2.59 euros, the sharpest drop in two months. The Dutch phone operator said it will sell 2.84 billion new shares for 1.06 euros each in a rights offer. That’s a 62 percent discount on yesterday’s closing price of 2.78 euros.
AstraZeneca Plc lost 1.9 percent to 3,325.5 pence as the U.K.’s second-biggest pharmaceutical company said revenue fell 13 percent to $6.39 billion in the three months ended March. That missed the $6.55 billion projected by analysts in a Bloomberg survey.
Logitech International SA tumbled 7.4 percent to 6.30 francs, the biggest slump since Jan. 24, as the maker of computer mice reported a first-quarter loss of $36 million, compared with a profit of $28 million a year earlier. The average analyst estimate had called for a gain of $46,000.
The volume of shares changing hands in companies on the Stoxx 600 was 15 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
To contact the editor responsible for this story: Andrew Rummer at firstname.lastname@example.org