European Stocks Rally Most in Month as Bank Shares RiseCorinne Gretler and Sofia Horta e Costa
European stocks gained the most in a month, with the Stoxx Europe 600 Index posting its longest winning streak since January, as banks advanced and a report showed Chinese imports beat forecasts in March.
BNP Paribas SA, Frances’s largest lender, and Banco Santander SA, Spain’s biggest, led a gauge of European banking shares to their largest advance in almost five months. SMA Solar Technology AG, Germany’s biggest solar-energy company, and Wacker Chemie AG added at least 5.8 percent. Gerresheimer AG rose 2.5 percent after reporting first-quarter revenue that beat analysts’ projections.
The Stoxx 600 increased 1.8 percent to 293.19 at the close of trading, its biggest advance since March 5. The measure has gained 4.8 percent this year as U.S. lawmakers agreed on a compromise budget and data fueled optimism the world’s biggest economy is recovering. U.S. stocks also rose today, sending the Standard & Poor’s 500 Index to an intraday record.
“Positive newsflow from China raised investors’ risk appetite,” said Kai Fachinger, who oversees about $700 million as portfolio manager at RobecoSAM AG in Zurich. “We’re seeing hope among market participants that the economic locomotive in China is strengthening. The recent worries in the euro zone regarding Cyprus and Italy are still in the back of investors’ minds, though. The focus in the coming weeks will be on the new earnings season, with special emphasis on potential revisions of company outlooks.”
China’s imports rose by a better-than-forecast 14.1 percent in March, while export growth slowed to 10 percent from a year earlier, the customs administration said today in Beijing.
“If global stock indices are to extend further as the year progresses, a healthy looking Chinese demand story will be an essential ingredient for this to occur,” Tim Waterer, a dealer at CMC Markets in Sydney, wrote in an e-mail. “The Chinese numbers today did not contain any red flags to dissuade buyers from entering the market at the current elevated levels.”
In the U.S., several members of the Federal Open Market Committee said the central bank should begin tapering its bond buying program later this year and stop it by year end.
The members “thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end,” according to the record of the Federal Open Market Committee’s March 19-20 meeting released today in Washington ahead of the regularly scheduled 2 p.m. time.
National benchmark indexes climbed in all of the 18 western European markets except Iceland. The U.K.’s FTSE 100 Index rose 1.2 percent, while France’s CAC 40 Index added 2 percent and Germany’s DAX Index gained 2.3 percent.
Portugal’s PSI 20 Index increased 4.4 percent for its biggest rally in almost three years. Banks led gains, with Banco Espirito Santo SA, Banco Comercial Portugues SA, and Banco BPI SA, the nation’s biggest, all surging more than 10 percent.
Bailout loans to Portugal and Ireland should be extended by seven years to aid each country’s return to the market, international creditors recommended in a joint report.
A gauge of European lenders advanced the most since Nov. 19, posting the best performance of the 19 industry groups in the Stoxx 600. BNP Paribas gained 5.3 percent to 41.47 euros. Banco Santander rose 5.1 percent to 5.52 euros, its biggest jump in more than seven months. Barclays Plc and Societe Generale SA climbed 4.3 percent to 298.25 pence, and 6.1 percent to 26.81 euros, respectively.
National Bank of Greece SA and Eurobank Ergasias SA surged 27 percent to 59.9 euro cents, and 26 percent to 29.4 cents, respectively. The planned merger of the two lenders has been postponed and not canceled, Bank of Greece Governor George Provopoulos told lawmakers in Athens today.
SMA Solar rose 8.8 percent to 19.88 euros. Wacker Chemie, which makes the main raw material in solar panels, gained 5.8 percent to 59.16 euros. Meyer Burger Technology AG climbed 7.9 percent to 7.94 Swiss francs.
First Solar Inc., the world’s largest thin-film solar manufacturer by output, surged the most on record yesterday after forecasting sales of $3.8 billion to $4 billion this year. Earnings will be $4 to $4.50 a share, exceeding the $3.57 average of 23 analysts’ estimates compiled by Bloomberg.
Gerresheimer, which develops and produces specialty glass and plastics products, gained 2.5 percent to 44.74 euros. First-quarter revenue jumped 10 percent to 296.7 million euros ($388 million), compared with the average analyst estimate of 286.7 million euros.
EasyJet Plc increased 6.7 percent to 1,090 pence after Citigroup Inc. raised Europe’s second-largest discount airline to buy from neutral, saying it expects the company’s 2013 earnings per share to grow about 30 percent, then 6 percent to 7 percent annually thereafter. Citigroup also said its sees dividend growth and possibly more special dividends.
The volume of shares changing hands in Stoxx 600 companies was 12 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.