European Stocks Rise to 10-Week High as KPN Jumps on Bid

European stocks advanced to their highest level since May as mining companies rallied after a report showed Chinese industrial production increased at a faster-than-expected pace.

A gauge of commodity producers posted its biggest increase in almost 11 months. Royal KPN NV soared the most in 15 months after billionaire Carlos Slim’s America Movil SAB offered to take over the Dutch phone company. Nestle SA fell for a third day, for the largest drag on the Stoxx Europe 600 Index.

The Stoxx 600 added 0.6 percent to 305.92 at the close of trading, extending its advance this week to 0.6 percent. The equity benchmark has rallied 11 percent from a low on June 24 as the European Central Bank and the Bank of England said interest rates will remain low for an extended period of time.

“With the upcoming end of the earning season, the market focus will shift back to the macro side where we most recently have seen clear signs of improved economic conditions,” said Anja Hochberg, head of investment strategy at Credit Suisse Group AG in Zurich. “In China, we observe stabilizing data after the more recent weakness.”

The Stoxx 600 climbed yesterday as faster-than-expected Chinese exports outweighed concern that the Federal Reserve will reduce its bond purchases this year.

National benchmark indexes advanced in all 18 western-European markets today. France’s CAC 40 rose 0.3 percent and Germany’s DAX gained 0.2 percent. The U.K.’s FTSE 100 increased 0.8 percent.

Chinese Economy

In China, a report from the National Bureau of Statistics showed that industrial output rose 9.7 percent in July from a year earlier, more than the 8.9 percent median forecast compiled by Bloomberg. The world’s second-largest economy grew at an annualized pace of 7.5 percent in the three months through June, the fifth consecutive quarter that gross domestic product has grown by less than 8 percent.

Fresnillo Plc and Randgold Resources Ltd., which both mine precious metals, rose 8.2 percent to 1,035 pence and 6.8 percent to 4,722 pence, respectively. Lonmin Plc jumped 7.7 percent to 350.5 pence. The Stoxx 600 Basic Resource Index added 4.6 percent, the best performance of the 19 industry groups in the European equity benchmark.

KPN surged 16 percent to 2.32 euros as America Movil offered 2.40 euros a share for the company. The price -- a 20 percent premium to KPN’s close yesterday -- would value the stake that America Movil doesn’t already own at 7.2 billion euros ($9.6 billion). The Mexican mobile-phone operator has a 29.8 percent holding in KPN. An agreement between the two companies to limit America Movil’s stake to 30 percent expired after KPN agreed last month to sell its German business E-Plus to Telefonica SA.

Telekom Austria

Telekom Austria AG, which is also partly owned by America Movil, soared 8.7 percent to 5.73 euros.

Stockmann Oyj rallied 6 percent to 12.01 euros as second-quarter net income of 19.5 million euros exceeded the average analyst projection of 15.4 million euros. The owner of department stores in Finland and Russia also reiterated its guidance for the year.

Rheinmetall AG advanced 4.5 percent to 37.54 euros as the German maker of armored vehicles said its defense business won 66 percent of its orders from non-European countries in the first half of 2013. The unit obtained 46 percent of orders from outside Europe in the year-earlier period.

Sky Deutschland AG gained 0.8 percent to 6.60 euros. Credit Suisse Group AG initiated coverage of the broadcaster with an outperform rating, meaning that investors should buy the shares. Credit Suisse said that German households will probably buy Sky’s services at a faster rate over the next few years. The company has exclusive rights to screen Bundesliga football matches. The new Bundesliga season starts tonight.

Nestle Retreats

Nestle slipped 1.3 percent to 62.45 Swiss francs. Deutsche Bank AG cut its price estimate for the maker of Nescafe by 4.8 percent to 60 francs. The world’s largest food company yesterday reported its slowest first-half sales growth in four years.

Fugro NV slumped 5.8 percent to 43.90 euros, the worst performance on the Stoxx 600. The world’s biggest deepwater-oilfield surveyor said first-half earnings before interest and taxes amounted to 133 million euros, compared with 154 million euros a year earlier. Fugro said that

The volume of shares changing hands on the Stoxx 600 was 15 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

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