European Stocks Gain for Seventh Day as China’s GDP Rises
European stocks rose for a seventh day, their longest winning streak this year, as China’s economic growth accelerated for the first time in three quarters.
Schindler Holding AG jumped 4.3 percent after the Swiss elevator maker announced a share buyback. Cap Gemini (CAP) SA climbed to six-year high after saying it will repurchase convertible bonds to forestall a potential dilution of equity. Grifols SA fell 3.5 percent after an investor sold a stake in Europe’s largest blood-plasma products maker.
The Stoxx Europe 600 Index advanced 0.8 percent to 318.47, extending its highest level since June 2008. The gauge rallied 2.2 percent this week as U.S. lawmakers agreed to extend the government’s borrowing authority until early 2014 and end a partial government shutdown.
“We’ve seen activity in China picking up over the past few months, and the GDP figure is in line with that,” Richard Scrope, who helps oversee about $160 million as a fund manager at Oriel Asset Management LLP in London, said by phone. “European earnings have been very mixed so far. Earnings expectations need to be supported by actual company results. Otherwise some valuations will start to look extended.”
The volume of shares changing hands in Stoxx 600-listed companies was 9.6 percent greater than the average of the past 30 days, according to data compiled by Bloomberg. Euro-area stock volatility signaled by options prices fell to a seven-month low.
In China, gross domestic product increased 7.8 percent in the third quarter from a year earlier, the National Bureau of Statistics said. That matched the median estimate of economists in a Bloomberg survey. The world’s second-biggest economy posted GDP growth of 7.7 percent and 7.5 percent in the first two quarters, slipping from a 7.9 percent expansion in the final three months of 2012.
Schindler advanced 4.3 percent to 127.30 Swiss francs, its biggest gain since November 2011. The elevator maker said it will buy back 4.1 million shares and 4.1 million participation certificates at 129 francs and 129.80 francs each, respectively. The repurchase price for equity marked a 5.7 percent premium to yesterday’s closing price.
Cap Gemini gained 5.5 percent to 48.06 euros after saying it plans to buy back convertible bonds due Jan. 1, 2014, through reverse bookbuilding. France’s biggest computer-services company also opened a separate bond issue to raise 350 million euros ($479 million) and pay for the buyback. Cap Gemini had said in July it will allocate 400 million euros to offset the potential share dilution created by the 2014 bonds.
Separately, Cap Gemini said yesterday after European markets closed that it has started exclusive talks to buy Areva SA’s software-services unit Euriware.
Svenska Cellulosa AB (SCAB) jumped 6.9 percent to 173.50 kronor, its biggest increase in a year. The maker of tissue paper and personal-hygiene products posted third-quarter net income of 1.45 billion kronor ($226 million). That exceeded the 1.36 billion-krona estimate of analysts surveyed by Bloomberg.
Yara International ASA climbed 4.3 percent to 247.10 kroner. The Oslo-based company said fertilizer deliveries increased 17 percent in the third quarter from a year earlier because of higher sales in Brazil.
Ziggo NV rose 2 percent to 31 euros after reiterating its full-year forecast for so-called organic-sales growth of about 1 percent. The Dutch cable-television provider, which this week rejected an offer from Liberty Global Plc, reported third-quarter revenue of 391 million euros, compared with analysts’ estimate of 393 million euros.
Grifols slipped 3.5 percent to 29.05 euros after Alken Asset Management LLP sold a 2.7 percent stake in the company. UBS AG said it placed the shares at 29 euros each.
Anglo American Plc lost 1.4 percent to 1,532 pence after saying third-quarter production fell 24 percent to 9.5 million tons at its Kumba iron-ore unit. Kumba, in which Anglo American owns 70 percent, has said it will need a new permit to access a third of the reserves at its largest mine in South Africa.
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