Europe Stocks Advance for Fourth Day; Burberry IncreasesCorinne Gretler
European stocks rose, with the benchmark Stoxx Europe 600 Index reaching a six-year high, after the World Bank raised its global growth forecast.
Burberry Group Plc gained 4.6 percent after the U.K.’s largest luxury-goods maker reported quarterly revenue that topped analysts’ estimates. Peugeot SA and Daimler AG gained as a gauge of European carmakers posted the best performance of 19 industry groups in the Stoxx 600. Chr. Hansen A/S declined 4.8 percent after it said net income missed projections.
The Stoxx 600 climbed 1 percent to 334.51 at the close of trading in London, taking its four-day gain to 1.9 percent. The index reached its highest level since January 2008.
“We think that the economic surprise for 2014 will be on the upside,” said Paris-based Frederic Tassin, who helps oversee 9 billion euros ($12 billion) in equities for Aviva Investors in France. “We’re more optimistic about the outlook for Europe. We’re still finding a lot of opportunities in terms of valuations in equities.”
The European equity index trades at 14.1 times its members’ projected earnings, data compiled by Bloomberg show. That compares with 15.6 times for the S&P 500. The volume of shares changing hands in Stoxx 600 companies was 35 percent greater than the average of the last 30 days, according to the data.
The World Bank increased its global growth forecasts, predicting the economy will expand 3.2 percent this year. That compares with a June projection of 3 percent and is up from 2.4 percent in 2013. The Washington-based lender raised the estimate for the richest nations to 2.2 percent from 2 percent. Part of the increase reflects improvement in the 18-nation euro area, and the U.S. growing twice as fast as Japan.
A U.S. report showed that manufacturing in New York, northern New Jersey and southern Connecticut grew at a faster pace than projected this month. The Federal Reserve Bank of New York’s general economic index rose to 12.51 in January, up from a revised 2.22 last month. That beat the median economist forecast in a Bloomberg News survey that called for an increase to 3.5.
Separately, the Fed will release its Beige Book business survey, which contains anecdotal reports on the economy from its 12 districts. The central bank, which next gathers Jan. 28-29, decided last month to begin trimming monthly bond purchases, citing improvement in the labor market.
National benchmark indexes advanced in all 18 western-European markets today except Iceland. France’s CAC 40 gained 1.4 percent and Germany’s DAX rallied 2 percent. The U.K.’s FTSE 100 climbed 0.8 percent.
Burberry jumped 4.6 percent to 1,537 pence. Retail revenue advanced 14 percent to 528 million pounds ($866 million) in the three months ended Dec. 31, compared with the 518 million pounds analysts had projected.
Peugeot gained 3.7 percent to 11.37 euros, and Daimler rose 2.9 percent to 65.50 euros. Nokian Renkaat Oyj, the Nordic region’s biggest tiremaker, rallied 4.4 percent to 35.84 euros. Stoxx 600 carmakers advanced 2.1 percent as a group.
Hennes & Mauritz AB climbed 2.7 percent to 291.80 kronor. Europe’s second-biggest clothing retailer posted a 10 percent increase in total sales in December, topping the 9.1 percent gain anticipated in a survey of analysts by SME Direkt.
Chr. Hansen, the world’s biggest maker of dairy enzymes, dropped 4.8 percent to 200.60 kroner. Net income in the first quarter fell to 29.2 million euros, compared with the average analyst estimate for 33.7 million euros.
Hargreaves Lansdown Plc slipped 4.1 percent to 1,446 pence for its biggest drop since October. The U.K.’s biggest retail broker reduced its fees for client investments. It negotiated with fund managers to cut their annual management charges for its top 150 funds to about 0.65 percent compared with an industry standard of 0.76 percent, the company said.