European Stocks Rally as Holcim, Lafarge Hold TalksJonathan Morgan
European stocks rose to a six-year high as Holcim Ltd. and Lafarge SA rallied and a U.S. report showed that the world’s biggest economy created more jobs in February than initially estimated.
Holcim jumped 6.9 percent after saying it has held advanced merger discussions with Lafarge, which surged 8.9 percent. Remy Cointreau SA increased 3.6 percent following a report that Brown-Forman Corp. has considered a purchase of the cognac maker. EasyJet Plc rose 2 percent after the low-cost airline said more passengers took its flights last month.
The Stoxx Europe 600 Index added 0.6 percent to 339.18 at the close, its highest level since January 2008. The benchmark has advanced 4.6 percent since March 24 as improving U.S. economic data signaled that the world’s largest economy is recovering from the harsh winter. European equities have climbed 1.6 percent this week.
“Even though the main number missed the target, I think investors are positive about seeing the revisions from previous months going up,” Henrik Drusebjerg, who helps oversee $220 billion as a senior strategist at Nordea Bank AB in Copenhagen, said in a phone interview. “If we are going to expect high equity prices in 2014, earnings will be the driver and for earnings to go up we need to see more growth.”
The Labor Department report showed that U.S. employers hired a net 192,000 people in March, fewer than the median economist estimate of 200,000 in a Bloomberg News survey. The government revised up the number of new hires in February to 197,000 from 175,000, showing that the bad winter had less of an impact on the jobs market than previously predicted. The release also showed that the unemployment rate stayed at 6.7 percent last month.
In Europe, a report from the Federal Statistics Office showed seasonally adjusted German factory orders increased 0.6 percent in February from January. Economists had forecast a gain of 0.2 percent, according to the median estimate.
European equities climbed yesterday as European Central Bank President Mario Draghi said that policy makers could turn to asset purchases to combat persistent low inflation in the 18-nation euro zone.
National benchmark indexes rose in 15 of the 18 western-European markets. France’s CAC 40 added 0.8 percent, while the U.K.’s FTSE 100 and Germany’s DAX rose 0.7 percent.
Holcim rallied 6.9 percent to 80.20 Swiss francs and Lafarge jumped 8.9 percent to 64.09 euros. The discussions between the world’s two largest cement makers may lead to a merger of equals, Holcim said in a statement. People familiar with the matter said the combined entity may have a market value of more than $50 billion.
Remy Cointreau gained 3.6 percent to 61.20 euros after the Betaville blog said that Brown-Forman, which owns the Jack Daniels brand, has worked with Goldman Sachs Group Inc. on whether to bid for the maker of Remy Martin.
EasyJet rose 2 percent to 1,827 pence. Europe’s second-biggest discount airline said it flew 5.1 million passengers in March, up from 4.9 million a year earlier. The British company also filled up more of the seats on its flights, increasing its load factor to 91.5 percent from 90.5 percent.
Renault SA added 3 percent to 72.93 euros. Les Echos said the French carmaker’s labor costs have dropped more than 4 percent since it reached an agreement on increased working time with staff last year. The newspaper cited the company’s head of human resources.
Mediaset SpA advanced 0.9 percent to 4.33 euros as the Italian broadcaster controlled by Silvio Berlusconi started selling a 25 percent stake in Ei Towers SpA at 40.15 euros a share, according to terms obtained. Mediaset’s Elettronica Industriale SpA business owned 65 percent of the operator of radio- and television-broadcasting towers on Feb. 24, according to data compiled by Bloomberg. Ei Towers, which also operates mobile-phone masts, slid 4.9 percent to 40.55 euros.
Man Group Plc increased 4.7 percent to 106.7 pence as the hedge-fund manager bought back some of its shares and HSBC Holdings Plc upgraded the stock to overweight, which is similar to a buy recommendation, from underweight. The brokerage said that Man has reduced its dependence on guaranteed funds.
TNT Express NV lost 3 percent to 7.02 euros. The Dutch package-delivery company said its Chief Financial Officer Bernard Bot has resigned from his post. The company added that it has started to look for his successor.
EDP-Energias de Portugal SA fell 2.6 percent to 3.22 euros. Jose de Mello SGPS SA sold a 2.59 percent stake in the company. Jose de Mello said it still holds a 2 percent stake in EDP.