Europe Stocks Climb as German Consumer Confidence BeatsInyoung Hwang
European stocks climbed the most in almost two weeks as a measure of German consumer confidence rose more than estimated and investors weighed U.S. reports on durable-goods orders and jobless claims.
Royal Mail Group Ltd. jumped the most in five weeks after the U.K. postal service that listed its shares in October said first-half earnings almost doubled. Vivendi SA advanced after saying it will replace its chairman once it spins off its wireless business. Accor SA dropped the most in two years after saying it will separate the operation and ownership of hotels into two businesses.
The Stoxx Europe 600 Index gained 0.6 percent to 324.04 at the close, for its biggest increase since Nov. 14. The gauge has climbed 0.6 percent in November as the European Central Bank cut its benchmark interest rate to a record low, offsetting concern the Federal Reserve may start paring its stimulus sooner than forecast.
“Equities are the only serious asset at this moment because of central-bank policy stances,” Percival Stanion, the London-based head of the multi-asset group at Baring Asset Management, which manages about $60 billion, said by telephone. “Whatever their valuation point, they’re likely to get more expansive over the next couple of years. You could have short term setbacks because of tapering or other policy maneuvers, but central banks won’t be trying to slow economic growth.”
National benchmark indexes rose in all 18 western European markets. The U.K.’s FTSE 100 increased 0.2 percent and France’s CAC 40 rose 0.4 percent. Germany’s DAX jumped 0.7 percent.
A release from Nuremberg-based research company GfK AG showed German consumer confidence will climb to 7.4 in December from a revised 7.1 this month. That beat the median estimate in a Bloomberg survey that called for an increase to 7.1 from an earlier November reading of 7.
In the U.S., data showed the final reading of the Thomson Reuters/University of Michigan consumer sentiment index rose to 75.1 in November from 73.2 in October. That exceeded the decline to 73.1 estimated by economists in a Bloomberg survey.
A report from the Commerce Department in Washington showed durable-goods orders fell 2 percent in October, matching the median forecast of economists in a Bloomberg survey, after rising 4.1 percent in the prior month.
A separate report showed first-time jobless claims in the week ended Nov. 23 declined to 316,000, the fewest in two months. The median forecast in a Bloomberg poll called for an increase to 330,000.
In Germany, Chancellor Angela Merkel reached a coalition agreement with the Social Democrats early today. The pact put her on track for a third term leading Europe’s biggest economy until 2017. It also signaled Merkel will continue her European policies including a rejection of joint liability for euro-area nations’ debt. The deal must pass a referendum among the 470,000 members of the SPD.
Royal Mail jumped 6 percent to 565 pence, its biggest gain since Oct. 23. The company said demand from online retailers for parcel deliveries helped increase operating profit after some costs by 97 percent to 283 million pounds ($461 million) in the six months ended Sept. 29.
Vivendi gained 0.9 percent to 18.77 euros after saying shareholder Vincent Bollore will replace Chairman Jean-Rene Fourtou once the telecommunications business is split from the media assets. The spinoff may entail distributing shares of its SFR mobile-phone unit to shareholders, the company said. Bollore owns 5 percent of Vivendi.
Compass Group Plc advanced 1.3 percent to 938.5 pence, the highest price since it listed its shares in February 2001. The world’s biggest catering company said it expects profit margins to improve this year as it posted full-year adjusted pretax profit that beat projections.
Assicurazioni Generali SpA rose 1.5 percent to 16.84 euros. Europe’s third-largest insurer plans to cut an extra 150 million euros ($204 million) of costs by 2015 and reduce debt as part of a plan to boost profit and strengthen capital.
Aker Solutions ASA rallied 10 percent to 109.10 kroner, the biggest gain in 21 months. Billionaire Kjell Inge Roekke’s investment firm Aker ASA bought 16.4 million shares of the Norwegian oil-services company at 115 kroner a share, 16 percent more than yesterday’s closing price.
Colruyt SA climbed 5.4 percent to 41.78 euros, for its largest increase in five months. Belgium’s biggest discount food retailer late yesterday posted first-half revenue and net income that exceeded forecasts.
Accor dropped 7.5 percent to 31.05 euros, its biggest decline since November 2011. Europe’s largest hotel operator said it will reorganize its business into two separate units. The HotelServices unit will operate about 460,000 hotel rooms under 14 brands. The HotelInvest unit will act as the owner and investor in hotels.
De La Rue Plc tumbled 6 percent to 861 pence. Citigroup Inc. cut its rating for the banknote printer to neutral from buy, citing a price war in the currency market.
Solvay SA fell 2.4 percent to 111.05 euros. The chemical maker lowered its forecast for earnings before interest, taxes, depreciation and amortization in 2016 to no more than 2.5 billion euros, from a previous prediction of 3 billion euros.