European Stocks Advance as China GDP Matches ForecastsSarah Jones
European stocks climbed to their highest level in almost six weeks, following the biggest weekly advance for the region’s equity benchmark in two months, as Chinese economic growth matched forecasts.
U.K. banks gained after Rightmove Plc doubled its forecast for the increase in British house prices this year. Commerzbank AG rose 4.7 percent as the lender sold 5 billion euros ($6.5 billion) of loans to Wells Fargo & Co. and Lone Star Funds.
The Stoxx Europe 600 Index climbed 0.4 percent to 297.38 at the close of trading in London, after earlier advancing as much as 0.7 percent. The gauge jumped 2.7 percent last week after Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus for the world’s largest economy.
“Equities are the asset class of choice in a world where more liquidity is being printed no matter what the Fed does,” Marino Valensise, who oversees about $60 billion as chief investment officer at Baring Asset Management Ltd., told Francine Lacqua in an interview on Bloomberg Television in London. “There will be volatility, but I don’t expect another European crisis in the next few months.”
Stocks climbed as a report showed China’s gross domestic product expanded 7.5 percent in the second quarter from a year earlier. That equaled the median forecast in a Bloomberg News survey and the government’s target rate for 2013. The economy expanded at a 7.7 percent pace in the first quarter, according to the National Bureau of Statistics.
The country’s Finance Minister Lou Jiwei signaled on July 12 that the world’s second-biggest economy may expand at a slower pace this year than the government has targeted.
“It’s very fashionable to be bearish on China nowadays,” said Baring’s Valensise. “The reality is 7.5 percent is in line with an earlier target and the five-year plan says 7 percent. This is an economy which is maturing, so it’s natural and obvious that the rate of growth will slow down.”
National benchmark indexes climbed in 13 of the 18 western-European markets today. The U.K.’s FTSE 100 and France’s CAC 40 rose 0.6 percent. Germany’s DAX climbed 0.3 percent.
Fitch Ratings lowered France’s credit rating on July 12, citing concern about the lack of growth and the accumulation of debt in Europe’s second-largest economy.
Royal Bank of Scotland Group Plc led a gauge of U.K. lenders higher today after Rightmove predicted that asking prices for British homes will increase 4 percent this year. It had forecast a gain of 2 percent. The property-website operator also reported that asking prices rose to a record in July.
RBS, which is owned by the state, jumped 5.1 percent to 320 pence. Lloyds Banking Group Plc, the nation’s biggest mortgage lender, added 2.5 percent to 69.4 pence, while Barclays Plc increased 1.2 percent to 309.8 pence.
Commerzbank climbed 4.7 percent to 6.25 euros after Wells Fargo and Lone Star agreed to set up a consortium to buy the German lender’s Hypothekenbank Frankfurt real-estate portfolio in the U.K. The transaction will close in the third quarter.
The stock also advanced after Focus magazine reported that the German government has discussed selling shares in the bank to UBS AG. A spokeswoman for Germany’s finance ministry said that there were no current plans to sell the holding.
SEB AB gained 2 percent to 70.75 kronor after Sweden’s fourth-largest bank by market value reported that net income jumped 28 percent to 3.79 billion kronor ($567 million) in the second quarter. That beat the average analyst estimate of 3.21 billion kronor.
Kuehne & Nagel
Kuehne & Nagel International AG added 2 percent to 112.30 francs after the world’s biggest sea-freight forwarder said profit increased 6.3 percent to 153 million Swiss francs ($161 million) in the second quarter. That met the average estimate in a Bloomberg survey.
Mediaset SpA surged 6.9 percent to 3.44 euros after UBS AG raised its target price on the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi to 3.60 euros from 2.40 euros. The brokerage said Mediaset may reveal improved advertising sales when it posts first-half results on August 1.
Man Group Plc slid 4 percent to 88.3 pence after Russian coal miner Sibanthracite Plc pulled its initial public offering. The GLG Emerging Markets Growth Fund, part of Man Group, had sought to raise as much as $214 million by selling its 25 percent stake in the IPO. The fund will now try to find another buyer for the holding, which is its biggest asset, two people with knowledge of the matter said on July 12.