European Stocks Rise on Earnings as Tesco, Syngenta GainInyoung Hwang
European stocks rose the most in six weeks as companies from Tesco Plc to Syngenta AG reported financial results and as data showed American housing and industrial activity increased.
Tesco advanced 2.6 percent after reporting trading profit that exceeded projections. Syngenta gained 2.3 percent after posting first-quarter revenue that met estimates and confirming its full-year sales target. GEA Group AG rallied 6.2 percent after agreeing to sell its heat-exchanges unit to Triton Advisers Ltd. ASML Holding NV tumbled the most since August 2011 after forecasting second-quarter sales below projections.
The Stoxx Europe 600 Index advanced 1.3 percent to 330.82 at the close of trading. The benchmark measure slid 1 percent yesterday as Ukraine accused Russia of deploying troops inside its territory and as German investor confidence fell for a fourth month. The equity gauge has gained 0.8 percent this year.
“There are forces at work like the Ukraine story and the China story, but I’m still quite constructive because the earnings season will be better than what investors are expecting,” said Gunther Westen, head of asset allocation and fund management at Meriten Investment Management GmbH in Dusseldorf, Germany. “The winter doldrums in the U.S. will fade, which will have a positive effect,” said Westen, whose firm manages $35 billion.
National benchmark indexes rose in all western-European markets except Iceland. The U.K.’s FTSE 100 increased 0.7 percent, France’s CAC 40 climbed 1.4 percent and Germany’s DAX rallied 1.6 percent.
A U.S. report in Washington showed housing starts rebounded to a 946,000 annualized pace in March, the first increase in four months, from a revised 920,000 rate in February. That fell short of the median forecast of economists surveyed by Bloomberg that called for 970,000. Separate data showed industrial production increased in March more than projected.
Federal Reserve Chair Janet Yellen will address the Economic Club of New York after the close of European markets. The U.S. central bank will also release its economic survey known as the Beige Book.
In China, data showed the world’s second-largest economy posted faster-than-estimated growth in the first quarter, while industrial-output growth in March missed projections.
Tesco climbed 2.6 percent to 293.8 pence. The U.K.’s largest retailer reported group trading profit of 3.32 billion pounds ($5.6 billion) in the year through Feb. 22, exceeding the 3.23 billion pounds projected by analysts.
Syngenta gained 2.3 percent to 344.20 Swiss francs, its highest price since Jan. 23. The world’s largest maker of crop chemicals said quarterly sales rose 5 percent to $4.68 billion, in line analysts’ estimates. Syngenta also confirmed its full-year sales target.
GEA rallied 6.2 percent to 32.31 euros, the biggest increase since November 2011. The German maker of food-processing equipment agreed to sell its heat-exchangers unit to private-equity firm Triton at an enterprise value of 1.3 billion euros ($1.8 billion).
International Consolidated Airlines Group SA rose 5.1 percent to 395.2 pence. HSBC Holdings Plc upgraded the parent of British Airways to overweight, or buy, from neutral, saying it sees strong earnings momentum in 2014 and 2015 and a rebound in the stock price from recent declines. IAG has tumbled 5.3 percent this month after a 4.5 percent drop in March.
Suez Environnement Co. climbed 7.1 percent to 14.72 euros, its biggest rally since 2012. Exane BNP Paribas raised its recommendation for Europe’s second-biggest water company to outperform, or buy, from neutral. The brokerage said the management should revisit a potential merger between Suez and Veolia Environnement SA, the largest water utility in Europe. Veolia, who rating was increased to neutral from underperform, added 4.3 percent to 14.38 euros.
ASML declined 5.3 percent to 58.50 euros. Revenue this quarter will be about 1.6 billion euros, Europe’s largest semiconductor-equipment supplier said. Analysts predict 1.7 billion euros, the average of projections compiled by Bloomberg.
Credit Suisse Group AG lost 1.5 percent to 27.42 francs. The second-biggest Swiss bank said lower investment-bank profit led to a 34 percent drop in first-quarter net income to 859 million francs ($974 million). That missed the 1.09 billion-franc average estimate in a Bloomberg survey of analysts.