Europe Stocks Are Little Changed After ECB Rate DecisionInyoung Hwang
European stocks were little changed, paring earlier gains, after the European Central Bank kept its benchmark interest rate unchanged.
Aggreko Plc jumped 3.5 percent as it said it will give shareholders an extra 200 million pounds ($334 million) after reporting that profit beat projections. Bouygues SA rallied 6.6 percent after it bid for Vivendi SA’s French phone unit SFR. Deutsche Telekom AG lost 3.6 percent after its chief executive officer said a sale of the T-Mobile US Inc. unit is less likely in the near term and after lowering a free cash-flow estimate.
The Stoxx Europe 600 Index rose less than 0.1 percent to 337.28 at the close of trading in London after earlier gaining as much as 0.6 percent. The gauge, which fell 0.2 percent this week amid tension over Ukraine, is 0.3 percent away from a six-year high reached Feb. 25.
“If they’re saying that growth is ticking up and inflation is ticking up, then the room they have to lower rates is going down,” Lex Van Dam, a London-based fund manager at Hampstead Capital LLP, said by telephone. “There was some hope of a rate cut and that doesn’t seem to be forthcoming, so that’s slightly disappointing to the market. Draghi won’t be easing too quickly. We were also trading at the higher end of the trading range.”
The ECB kept its benchmark interest rate unchanged at a record low 0.25 percent after better-than-forecast economic data eased the immediate need to cut interest rates. The Bank of England maintained its rate at an all-time low of 0.5 percent and its bond-purchase plan at 375 billion pounds.
A U.S. Labor Department report showed initial jobless claims fell by 26,000 to 323,000 in the week ended March 1. That was fewer than economists had forecast. Factory orders dropped 0.7 percent in January, missing estimates, after declining a revised 2 percent in December, according to separate data.
The number of shares changing hands today in Stoxx 600-listed companies was 50 percent greater than the 30-day average, according to data compiled by Bloomberg.
Benchmark indexes rose in 14 of the 18 markets in western Europe. The U.K.’s FTSE 100 gained 0.2 percent and France’s CAC 40 advanced 0.6 percent. The Swiss Market Index added 0.3 percent, while Germany’s DAX was little changed.
Aggreko climbed 3.5 percent to 1,628 pence. The world’s largest supplier of mobile-power generators said it is giving shareholders 200 million pounds in addition to its ordinary dividend. The company’s 2013 pretax profit of 338 million pounds beat the average analyst estimate for 333 million pounds.
Bouygues jumped 6.6 percent to 30.67 euros. The construction and telecommunications group offered 10.5 billion euros ($14.4 billion) in cash for SFR, a deal that would potentially create a phone carrier rivaling Orange SA. Altice SA, which put in a separate bid, values SFR at about $20 billion through a mixture of debt, cash and equity, people familiar with the matter said.
Vivendi, Europe’s largest media-to-telecommunications group, rose 0.9 percent to 20.75 euros, while Altice lost 4.2 percent to 30.10 euros.
Orange rallied 11 percent to 10.13 euros. France’s largest phone company said a key measure of profit may not fall this year for the first time in at least five years. Restated earnings before interest, taxes, depreciation and amortization will be between 12.1 billion euros and 12.6 billion euros.
Aviva Plc advanced 8.1 percent to 504 pence, the most since September 2008. The U.K.’s second-biggest insurer by market value reported that operating income increased 6 percent to 2.05 billion pounds in 2013. That beat the 1.99 billion-pound estimate of 21 analysts provided by the company.
Logitech International SA jumped 3.9 percent to 14.65 Swiss francs. The world’s biggest maker of computer mice said it will buy back up to $250 million of its shares. The company forecast 2014 sales of $2.1 billion.
Schroders Plc rose 5.3 percent to 2,727 pence. The U.K.’s biggest publicly traded money manager raised its dividend by 40 percent after reporting that 2013 pretax profit before one-time items climbed 41 percent to 507.8 million pounds.
Bureau Veritas SA gained a record 7.1 percent to 21.42 euros. The French goods-inspection company said sales and profitability will increase this year. It reported that adjusted operating margin rose to 16.7 percent in 2013, according to a statement in Les Echos.
Deutsche Telekom fell 3.6 percent to 11.76 euros. The sale of the T-Mobile US Inc. unit is less likely in the near term because of regulatory hurdles, CEO Timotheus Hoettges told directors yesterday, according to two people with direct knowledge of the matter.
Germany’s largest phone company said free cash flow will increase “slightly” in 2015 after falling 8.7 percent to 4.2 billion euros in 2014. Deutsche Telekom, which plans higher spending to boost its U.S. business, earlier projected free cash flow of about 6 billion euros for next year.
IMI Plc lost 4.3 percent to 1,481 pence. The engineering company forecast that margins in the first half of the year will be lower than in the year-earlier period.
Balfour Beatty Plc sank 7.4 percent to 297.6 pence for the biggest decline since April. Britain’s biggest construction company posted 2013 sales of 8.75 billion pounds, missing the 9.21 billion pounds that analysts had estimated.
Merck KGaA fell 4.4 percent to 119.5 euros. The maker of the Erbitux cancer drug said profit this year will be similar to last, when the company earned 3.25 billion euros. Merck reported a 0.7 percent increase in fourth-quarter earnings before interest, taxes, depreciation and amortization.