European Stocks Advance as Confidence Data Beat Forecasts
European stocks advanced, halting a two-day decline, as a gauge of euro-area confidence increased in May more than forecast.
A.P. Moeller-Maersk A/S (MAERSKA) rose 3.9 percent after Denmark’s biggest company boosted its outlook for 2014 underlying profit. BNP Paribas SA (BNP) lost 1.3 percent after a person familiar with the matter said U.S. authorities are seeking more than $5 billion to settle charges that the French lender violated sanctions.
The Stoxx Europe 600 Index added 0.6 percent to 340.34 at the close of trading in London, after earlier falling as much as 0.5 percent. The benchmark is within 0.5 percent from its highest level in more than six years, reached on May 13 after European Central Bank President Mario Draghi said policy makers are ready to take action.
“Europe may outperform the U.S. in the weeks ahead,” Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England, said in an interview. “The ECB especially will help Europe. Italy and Spain are likely to benefit the most, as well as Germany, so with this in mind, falls in equity prices will be limited.”
National benchmark indexes rose in 15 of the 18 western European markets today. France’s CAC 40 climbed 0.4 percent, the U.K.’s FTSE 100 added 0.3 percent, while Germany’s DAX gained 0.6 percent.
An index of household confidence in the euro zone rose to minus 7.1 in May, the highest since October 2007, from minus 8.6 in April, the European Commission in Brussels said in a preliminary report today. That beat the median forecast of minus 8.3 in a Bloomberg News survey of 23 economists.
The Bank of England said the case for an interest-rate increase is strengthening as the economy recovers and the risk of financial imbalances mounts, according to minutes of the Monetary Policy Committee’s most recent meeting released today.
The Federal Reserve publishes minutes of its April policy meeting after the close of European markets today.
Maersk’s A shares rose 3.9 percent to 13,100 Danish kroner. The owner of the world’s largest container-shipping line boosted its outlook for 2014 underlying profit to about $4 billion from a previous prediction of about $3.6 billion. First-quarter earnings before interest and taxes rose to $2.24 billion, beating the $2.09 billion median estimate of analysts surveyed by SME Direkt.
Britvic Plc (BVIC) rallied 7.9 percent to 749 pence. The maker of Robinsons fruit drinks reported first-half revenue of 670.7 million pounds, exceeding the 657.8 million pounds estimated by analysts. Ebit reached 59 million pounds, beating predictions for 57.6 million pounds.
DCC Plc jumped 7.6 percent to 3,340 pence. The Irish distribution company posted full-year adjusted earnings per share of 191.2 pence, surpassing the 185 pence projected by analysts.
EON SE rose 3.2 percent to 13.84 euros. RBC Capital Markets raised its recommendation on Germany’s biggest utility to outperform, similar to buy, from underperform. RWE AG added 3.6 percent to 28.45 euros after RBC upgraded the shares to sector perform, from underperform.
RBC expects a Munich court to suspend the payment of a nuclear-fuel tax by utilities and order a refund of taxes already paid. That decision, combined with a recent similar ruling by Hamburg’s finance court, will provide a one-time boost to both companies’ earnings and profitability, according to RBC.
BNP Paribas lost 1.3 percent to 51 euros, after earlier falling as much as 3.1 percent. U.S. authorities are seeking more than $5 billion from France’s largest bank to settle federal and state investigations into the lender’s dealings with sanctioned countries including Sudan and Iran, according to a person familiar with the matter. Discussions are continuing and the number could change, the person said.
Wm Morrison Supermarkets Plc (MRW) retreated 2.2 percent to 205 pence. The smallest of the U.K.’s four main supermarket chains was lowered to sell from hold by Deutsche Bank AG, which said the recent outperformance of its shares isn’t justified given the lack of positive news and recent deterioration in sales. The stock rallied 9.8 percent from May 7 through May 20, while the FTSE 100 increased 0.1 percent over the same period.
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