European Stocks Rise as Grifols Gains, BSkyB SinksNamitha Jagadeesh
European stocks advanced, extending five weeks of gains, amid takeovers by health-care companies and better-than-forecast industrial output in China.
Grifols SA jumped 4.5 percent after agreeing to buy a unit from Novartis AG and Shire Plc climbed after saying it will acquire ViroPharma Inc. Lonmin Plc increased 3.9 percent as the world’s third-largest platinum producer returned to profit. British Sky Broadcasting Group Plc plunged the most in five years after BT Group Plc won the rights to broadcast UEFA Champions League and Europa League soccer games.
The Stoxx Europe 600 Index rose 0.3 percent to 323.57 at the close of trading in London, as three shares advanced for each one that fell. The benchmark measure gained for five straight weeks, trading near its highest valuation since 2009, as the European Central Bank unexpectedly cut its key interest rate and the Federal Reserve maintained bond purchases.
“We’ve seen quite a few indicators that China’s domestic economy is picking up,” said Andrea Williams, who helps oversee 50 billion pounds ($80 billion) as head of European equities at Royal London Asset Management in London. “It feels like we’re through with the worst fears about China and the economy is back on an upwards trend. This is good for European companies. I remain concerned about valuations in Europe, though it looks like monetary support is overriding that at the moment.”
The Stoxx 600 has surged 16 percent this year, putting it on course for the biggest annual gain since 2009. The index is trading at 15 times its companies’ estimated earnings, near the most expensive valuation since the end of 2009, according to data compiled by Bloomberg.
In China, industrial production jumped 10.3 percent in October from a year earlier, the National Bureau of Statistics said Nov. 9. That was higher than September’s 10.2 percent and exceeded the 10 percent median projection of economists surveyed by Bloomberg. Inflation was a less-than-forecast 3.2 percent and producer prices fell 1.5 percent.
President Xi Jinping and top Communist Party leaders have gathered in Beijing for a meeting known as the third plenum to outline a blueprint to sustain growth and drive urbanization in the world’s second-biggest economy. The meeting of about 370 officials will conclude tomorrow.
National benchmark indexes climbed in all of the western European markets, except Iceland and Greece. The U.K.’s FTSE 100 Index and Germany’s DAX added 0.3 percent, while France’s CAC 40 advanced 0.7 percent.
Grifols, Europe’s largest blood-plasma products maker, advanced 4.5 percent to 32.36 euros. Novartis said will sell its blood-transfusion diagnostics unit to the Spanish company for $1.68 billion, completing the deal in the first half of 2014.
Shire rose 0.9 percent to 2,822 pence after the Dublin-based drugmaker agreed to buy ViroPharma for about $4.2 billion. Shire will pay $50 a share in cash, 27 percent more than the closing price of ViroPharma on Nov. 8.
Lonmin rallied 3.9 percent to 340.9 pence after posting full-year profit of 31 cents a share, compared with a loss of 202 cents a share in the previous year. That exceeded the 13 cent-median forecast of analysts surveyed by Bloomberg.
Bwin.Party Digital Entertainment Plc climbed 3.6 percent to 125.9 pence after saying the New Jersey Division of Gaming Enforcement will allow the gambling company to participate in its online-gaming market. Bwin plans to introduce poker and casino games in the U.S. state, according to a statement.
New Jersey legalized online gambling in February, becoming the most populous U.S. state to do so. Dave Rebuck, director of the gaming enforcement division, has said he expects operators to start offering services by Nov. 26.
Gauges of mining, media and telecommunications companies posted the biggest losses among 19 industries in the Stoxx 600.
BSkyB retreated 11 percent to 829 pence, the largest drop since October 2008. BSkyB, whose channels have aired top English soccer games since the Premier League’s inception in 1992, lost out to BT in bidding for the rights to broadcast the UEFA tournaments from 2015.
BT, which agreed to pay $1.4 billion for the rights, rose 0.5 percent to 374.1 pence. ITV Plc, owner of the U.K.’s biggest commercial TV station, slid 1.6 percent to 187.4 pence.
RSA Insurance Group Plc tumbled 11 percent to 108.1 pence for the largest drop in eight months. The U.K.’s biggest non-life insurer by market value said it suspended three top executives at its Irish unit amid a probe into finance and claims functions. The full-year operating result will be 70 million pounds lower than analysts estimate after it had to inject capital into the division.
RSA slid 6.3 percent on Nov. 5 after saying it will miss its 10 percent target for return on equity following last month’s storms in Europe.
Cobham Plc dropped 5 percent to 270.1 pence, its biggest slide in almost one year. The world’s biggest maker of airborne-refueling equipment said organic revenue will decline by “low to mid-single digits” in 2014 because of uncertainties in the U.S. government’s defense-spending plans. Cobham generates about 38 percent of revenue from U.S. arms sales.