European Stocks Advance on Chinese Manufacturing Report
European stocks advanced the most in eight weeks as a gauge of Chinese manufacturing activity exceeded economists’ estimates. U.S. index futures also rose.
BHP Billiton Ltd. and Rio Tinto Group each increased more than 2 percent as an index of mining companies advanced. Spanish lenders led gains by a gauge of banks. Vodafone Group Plc rose to its highest price since 2001 after a person familiar with the matter said Verizon Communications (VZ) Inc. has reached a deal to buy the British mobile-phone operator’s 45 percent stake in their U.S. joint venture for $130 billion.
The Stoxx Europe 600 Index added 1.9 percent to 302.94 at the close of trading, its biggest gain since July 4. The equity benchmark fell 2.4 percent last week to its lowest level since July 17 amid concern that the U.S. and its allies will take military action against Syria. Standard & Poor’s 500 Index futures climbed 1 percent today. U.S. markets are closed for the Labor Day holiday.
“A short-term lift in business-cycle indicators in China is dampening market skepticism short term, so risk appetite is revived as we are heading into a week of vital importance for the direction of equities,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Pension A/S in Copenhagen, wrote in an e-mail.
The European Central Bank holds its next policy meeting on Thursday. Officials will probably decide to leave interest rates unchanged at 0.5 percent, according to all 55 estimates in a Bloomberg survey.
In China, a measure of manufacturing from the National Bureau of Statistics and China Federation of Logistics and Purchasing rose to 51 in August from 50.3 in July. That beat the median economist estimate for a reading of 50.6 in a Bloomberg survey. A figure greater than 50 means that activity expanded.
Markit Economics and HSBC Holdings Plc’s purchasing managers’ index for manufacturing in the world’s second-largest economy climbed to 50.1 last month from 47.7 in July.
BHP Billiton and Rio Tinto advanced 2.3 percent to 1,921 pence and 4.2 percent to 3,035 pence, respectively. A gauge of mining-company shares posted the best performance of the 19 industry groups on the Stoxx 600. Anglo American Plc, which owns Amplats, the world’s largest platinum producer, gained 3.9 percent to 1,536 pence.
In Europe, the final reading of a euro-area manufacturing index increased to 51.4 in August, more than the 51.3 median estimate of economists surveyed by Bloomberg. A measure of U.K. factory output rose to 57.2 last month from 54.8 in July. That also exceeded the median economist estimate.
National benchmark indexes climbed in every western-European market except Greece. The U.K.’s FTSE 100 rose 1.5 percent, while Germany’s DAX added 1.7 percent and France’s CAC 40 gained 1.8 percent. The number of shares trading hands today in Stoxx 600-listed companies was 15 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
A purchasing managers’ index for Spain climbed to 51.1 from 49.8 in July, meaning that the country’s manufacturing industry expanded for the first time in 28 months.
Spain’s IBEX 35 Index (IBEX) jumped 1.7 percent. Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA contributed the most to the gauge’s advance, rising 2 percent to 5.45 euros and 2.2 percent to 7.38 euros, respectively.
U.S. President Barack Obama said he will ask members of Congress to back his plan for a military strike on Syria. Congressional leaders have agreed to debate military action against the regime of President Bashar al-Assad when lawmakers return from their recess on Sept. 9. Britain’s parliament last week rejected a proposed strike.
Vodafone gained 3.4 percent to 213.2 pence. The board of Verizon Communications will vote on the terms of the deal today, said the person who asked not to be identified because the details remain private. Europe’s largest mobile-phone operator confirmed yesterday that it has held advanced discussions with Verizon about selling its 45 percent stake in their joint venture for $130 billion.
Telecom Italia SpA (TIT), Italy’s biggest telephone company, added 3.9 percent to 55 euro cents. A gauge of telecommunications operators climbed 2.8 percent. BT Group Plc, the biggest fixed-line phone company in the U.K., increased 4 percent to 338.2 pence.
Teleperformance SA (RCF) climbed 2.9 percent to 35.10 euros. Societe Generale SA raised its recommendation on the French operator of call centers to buy from hold. The brokerage said the shares’ recent decline provides a buying opportunity. The stock has fallen 14 percent since its high on July 18.
Havas SA (HAV) surged 6 percent to 5.82 euros, its largest rally in 14 months. The French advertising company reported first-half profit of 58 million euros ($77 million), beating the average analyst estimate of 55.9 million euros.
Inmarsat Plc (ISAT) gained 5.4 percent to 732.5 pence. Morgan Stanley upgraded the world’s biggest supplier of maritime satellite services to overweight from equal weight, meaning that investors should hold more of the shares than are represented in benchmark indexes. Morgan Stanley said the outlook for the company’s core business has improved.
Helvetia Holding AG (HELN) added 3.3 percent to 412 Swiss francs. Switzerland’s fourth-biggest insurer said first-half profit rose because of increased life-insurance sales and an acquisition in France. Net income climbed to 179.5 million Swiss francs ($192 million) in the six months through June, beating the average analyst estimate of 164.4 million francs.
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