European Stocks Erase Their Decline as U.S. Equities Rise
European stocks erased their decline in the final half an hour of trading, leaving the Stoxx Europe 600 Index at a five-year high, as U.S. equities rebounded after Congress agreed to extend the American government’s debt limit.
SABMiller Plc rose 4.2 percent after posting an unexpected increase in lager volumes. Sulzer dropped 4.4 percent as the Swiss pump maker cut its full-year sales forecast for a second time. Outotec slid the most in almost five years after the supplier of smelters to mining companies reduced its guidance for 2013. Royal KPN (KPN) NV plunged 7.9 percent after America Movil SAB withdrew its $9.7 billion takeover offer for the company.
The Stoxx 600 added 0.1 percent to 315.98 at the close, rebounding from a decline of as much as 0.6 percent. The equity benchmark rose to its highest level since June 2008 yesterday on optimism U.S. lawmakers would reach a deal to reopen the government and increase the debt ceiling.
“There’s a risk of a mismatch between investor optimism and company earnings,” said Claire Chaves D’Oliveira, head of equity management at Groupama Asset Management SA in Paris. “Companies have surprised today on the downside on very well-known macro situations, like an emerging-market slowdown, but analysts haven’t been able to keep up. There’s long-term optimism, but short-term disappointment.”
In the U.S., President Barack Obama signed into law a measure to extend the nation’s borrowing authority into early 2014 and end the government shutdown that started Oct. 1. The deal avoided a default and means that federal workers will return to their jobs from today.
The Standard & Poor’s 500 Index rose as high as 1,726.15, above its record close on Sept. 18.
Dagong Global Credit Rating downgraded the U.S. to A- from A and reiterated its negative outlook on the government of the world’s largest economy. The rating company said the U.S. will struggle to avoid repeating this week’s political impasse over the limit on sovereign debt, according to a statement.
National benchmark indexes climbed in 10 of the 18 western-European markets. The U.K.’s FTSE 100 gained 0.1 percent and France (CA)’s CAC 40 dropped 0.1 percent, while Germany’s DAX declined 0.4 percent.
SABMiller gained 4.2 percent to 3,167 pence after the brewer of Peroni said lager volumes climbed 1 percent in the six months through September. Analysts had predicted no growth, according to the median estimate.
Carrefour SA added 3.1 percent to 27.64 euros, its highest price since May 2011. France’s biggest retailer said sales at its domestic hypermarkets open at least a year climbed 1.9 percent in the third quarter, the first growth since the second quarter of 2011. Carrefour generated 46 percent of its total sales in France last year.
British Sky Broadcasting Group Plc (BSY) jumped 7.1 percent to 940 pence, its biggest rally since June 2010, after saying it added 111,000 new broadband customers in the three months through September. Sales jumped 7.5 percent to 1.84 billion pounds ($2.97 billion) in the period, according to a statement. That beat the 1.82 billion-pound average analyst projection.
Sulzer (SUN) fell 4.4 percent to 132.20 Swiss francs after predicting that 2013 sales will probably not exceed the 4.02 billion francs ($4.5 billion) generated in 2012. The pump manufacturer predicted slight growth for revenue this year when it reported half-year results on July 23. That was a downgrade from an earlier forecast for moderate growth.
Outotec slumped 15 percent to 8.23 euros. The Finnish company forecast that it will generate no more than 2.1 billion euros ($2.9 billion) in sales in 2013 because its order intake has declined in the first nine months of this year. Outotec had predicted revenue of as much as 2.3 billion euros.
KPN tumbled 7.9 percent to 2.24 euros as America Movil failed to persuade the Dutch phone carrier to accept a price of 2.40 euros a share. The Mexican telecommunications operator owned by billionaire Carlos Slim still retains a stake of about 30 percent after dropping the bid, and has yet to decide what to do with its holding, according to a company spokesman.
Nutreco NV slid 4 percent to 36.26 euros after the world’s largest supplier of fish feed forecast earnings before interest, taxes and amortization of about 255 million euros in 2013. The company had predicted it would at least match last year’s 262.1 million euros.
Metso Oyj sank 6.3 percent to 27.18 euros after projecting that full-year sales and earnings will probably drop more than the engineering-services company had predicted because of lower profitability at its Valmet Automotive Oy business.
Abengoa SA slumped 8.9 percent to 1.84 euros. The Seville, Spain-based bioethanol producer sold 450 million euros of B-shares at 1.80 euros each, an 11 percent discount to yesterday’s closing price.
The number of shares trading hands today in Stoxx 600-listed companies was 10 percent greater than the average of the past 30 trading days, data compiled by Bloomberg showed.
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