European Stocks Rise on China Trade Report, EU Budget

European stocks advanced the most in a month, paring a weekly decline, as trade data from China exceeded estimates and European Union leaders agreed the first-ever cuts to the bloc’s budget.

Software AG, Germany’s second-biggest software maker, rose

2.7 percent after saying it will buy back shares. Credit Agricole SA jumped the most in more than four months after Exane BNP Paribas SA raised its recommendation on the stock. Telecom Italia SpA declined to a six-month low after posting full-year earnings below analysts’ projections.

The Stoxx Europe 600 Index climbed 1.2 percent to 287.34 at the close of trading, the most since Jan. 2, paring the week’s drop to 0.3 percent. It has still gained 2.7 percent so far this year as U.S. lawmakers agreed on a budget preventing spending cuts and tax increases that had threatened to push the world’s biggest economy into recession.

“The improvement in China’s data is a positive for European equities,” Richard Scrope, who helps manage 100 million pounds ($159 million) as fund manager at Oriel Asset Management LLP in London, said in a phone interview. “The European Union’s decision to cut the budget is a prudent one. A prioritization of where money should be spent is better than simply increasing spending on everything.”

The volume of shares changing hands in companies listed on the Stoxx 600 was 6 percent lower than the average over the past 30 days, according to data compiled by Bloomberg.

China Trade

China’s exports and imports rose more than estimated in a January that had five working days more than last year, a report showed. Exports increased 25 percent from a year earlier, the customs administration said, compared with economists’ projection of 17.5 percent. Imports climbed 28.8 percent, exceeding the 23.5 percent median estimate in a Bloomberg News survey.

EU leaders agreed to a seven-year budget that cuts spending for the first time, bowing to U.K. Prime Minister David Cameron’s insistence on thrift.

The deal was struck after 25 1/2 hours of talks in Brussels, according to a post on Twitter by EU President Herman Van Rompuy today. While he didn’t disclose a figure, the final draft blueprint for 2014-2020 included a spending ceiling of 960 billion euros ($1.3 trillion), down from an original proposal of

1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle.

European Earnings

Of the 108 companies in the Stoxx 600 that have reported since Jan. 8, 50 percent exceeded analysts’ profit estimates, according to data compiled by Bloomberg. Earnings for 2012 at companies in the index will drop 1.2 percent, estimates compiled by Bloomberg show.

National benchmark indexes advanced in all of the 18 western European markets except Greece. The U.K.’s FTSE 100 gained 0.6 percent, France’s CAC 40 rose 1.4 percent and Germany’s DAX added 0.8 percent.

Software AG advanced 76 cents to 29.23 euros. Germany’s second-biggest software maker said late yesterday it will spend as much as 180 million euros buying back shares.

Credit Agricole rallied 6.9 percent to 7.35 euros, the most since Oct. 1. BNP Paribas raised its recommendation on France’s third-largest bank to buy from hold, citing the improved credibility of management and higher solvency than estimated.

BNP Paribas added 2.4 percent to 44.60 euros after Bank of America advised buying the shares, saying the lender’s results should confirm it has enough capital to support growth.

Betting Gains

Bwin.Party Digital Entertainment Plc jumped 16 percent to 136 pence, the most since December 2011, while 888 Holdings Plc surged 17 percent to 135 pence, its highest price since September 2008.

The British betting companies climbed after New Jersey Governor Chris Christie, who vetoed Internet gambling in 2011, said yesterday he would allow a 10-year trial period of online wagers for games conducted in Atlantic City casinos.

Telecom Italia slipped 1.3 percent to 66 euro cents, its lowest price since August, after reporting 2012 earnings before interest, taxes, depreciation and amortization of 11.7 billion euros. Analysts on average had estimated 11.8 billion euros.

TDC A/S retreated 2 percent to 40.15 kroner after a person familiar with the matter said a stock sale in Denmark’s biggest phone company has been increased to 120 million shares from 80 million yesterday. UBS AG, which is managing the sale, has enough demand to cover the offer, said the person, who asked not to be identified because the deal is private.

Getinge AB tumbled 4.8 percent to 189.4 kronor after the Swedish maker of sterilization systems said it won’t reach its operating margin target this year or in 2014.

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