European Stocks Post Sixth Weekly Gain on Fed SignalsAlexis Xydias
European stocks advanced for a sixth week, posting their longest winning streak since August 2012, as signs emerged the Federal Reserve won’t rush to reduce the pace of its stimulus, outweighing data that showed the euro-area economic recovery is faltering.
TalkTalk Telecom Group Plc rallied 12 percent after raising its revenue-growth target. Swiss Life Holding AG jumped to a five-year high after naming a new chief executive officer. Bouygues SA rose 5 percent after reporting better-than-estimated earnings. Serco Group Plc posted the biggest drop in more than 22 years after forecasting a profit decline next year.
The Stoxx Europe 600 Index climbed 0.1 percent to 323 this week. The 600-share regional benchmark has surged 15 percent this year, reaching its highest level since May 2008, as central banks around the world pledged to continue their support for economic growth. The Euro Stoxx 50 Index, a measure for euro-area shares, gained 0.7 percent this week.
In the U.S., equities extended records as Janet Yellen, nominated to succeed Ben Bernanke as Fed chairman, said she will ensure the $85 billion of bond purchases are not scaled back too soon. The recovery in the world’s largest economy remains fragile, she said at her confirmation hearing.
“Yellen is not going to taper until the very earliest March, and maybe later,” said James Butterfill, who helps manage about $49 billion as head of global equity strategy at Coutts & Co. in London. “That is positive for income stocks and generally stocks. Our view is that there is probably not huge upside coming into the year-end but over the longer run, equities are not overvalued, more like fairly valued.”
Data showed that France’s economy unexpectedly shrank in the third quarter, while German gross domestic product slowed and Italy extended its recession.
That led to a slowdown in euro-area growth, where GDP expanded 0.1 percent in the three months through September, compared with 0.3 percent growth in the second quarter, according to a report from the European Union’s statistics office in Luxembourg.
In Asia, the central committee of the Communist Party of China held its first plenary session under the presidency of Xi Jinping, where policy makers favored giving the markets a decisive role in the country’s economic development. The official Xinhua News Agency said on Nov. 15 China will ease its one-child policy, expand farmers’ land rights and allow more private investment in state industries.
National benchmark indexes rose in 11 of the 18 western European markets. Germany’s DAX gained 1 percent. The U.K.’s FTSE 100 fell 0.2 percent. France’s CAC 40 added 0.8 percent.
TalkTalk rallied 12 percent. The British broadband provider that split from Carphone Warehouse Group Plc said it expects sales in the 12 months through March to increase at least 3 percent in the full-year, higher than a previous target for 2 percent growth.
Swiss Life gained 5.2 percent. Switzerland’s biggest life insurer said Nov. 12 its CEO Bruno Pfister will resign and be replaced by Chief Investment Officer Patrick Frost on July 1. The Swiss company also said third-quarter sales rose 8 percent.
Bouygues climbed 5 percent. The French building and telecommunications company rose the most in two months on Nov. 14 after spending cuts at the mobile-phone and broadcasting divisions helped it post profit that beat analyst estimates.
Serco Group Plc plunged 22 percent. The services company forecast a decline in profit next year as it grapples with a criminal inquiry into the handling of the U.K. government’s prison contracts.
British Sky Broadcasting Group Plc tumbled 12 percent. BT Group Plc obtained the rights to two of the biggest contests in European soccer, ending BSkyB’s dominance in sports that helped the Rupert Murdoch-owned company become the biggest pay-TV provider in the U.K. BT shares added 2.1 percent.
Royal Ahold NV dropped 7.6 percent. The biggest Dutch retailer said Nov. 14 it has lost market share in the Netherlands. Also, the company’s plan to redistribute cash to shareholders fell short of some analysts’ expectations.
GDF Suez SA declined 5.4 percent. France’s former natural-gas monopoly reported a drop in nine-month profit and said the value of European electricity generation and natural-gas storage assets may be cut.