European Stocks Extend Three-Week High as Energy Producers ClimbNamitha Jagadeesh and Sofia Horta e Costa
European stocks rose for a fourth day, led by energy companies, as weaker-than-forecast U.S. data fueled speculation the Federal Reserve won’t rush to raise rates.
The Stoxx Europe 600 Index added 0.4 percent to 407.87 at the close of trading, reversing an earlier drop of 0.4 percent. Oil stocks rose the most among industry groups. Transocean Ltd. advanced 3.5 percent after the owner of the rig that sank in the Gulf of Mexico in 2010 settled its remaining issues with BP Plc. Shares of the U.K. company gained 1.3 percent.
U.S. reports on existing home sales in April and May manufacturing missed projections, while jobless claims increased more than forecast last week. Federal Reserve officials didn’t expect to raise interest rates in June, according to minutes from their last meeting released Wednesday.
“At least in the very short-term, bad macro equals good news for stocks, as a Fed rate hike is pushed further down the road,” said Ralf Zimmermann, an equity strategist at Bankhaus Lampe KG in Dusseldorf, Germany. “However, I have my doubts whether such an interpretation will last.”
The Stoxx 600 fell earlier as a composite index showed manufacturing and services in the euro area expanded less than forecast in May. Germany’s output missed projections, while France’s contracted less than estimated.
The equity gauge erased a drop after a summary showed European Central Bank policy makers were satisfied with the start of their quantitative-easing program when they met in April. Stocks climbed 2.5 percent in the past three days as the ECB said it plans to boost bond purchases in May and June.
Booker Group Plc jumped 12 percent after proposing to return cash to shareholders and saying it will buy the Londis and Budgens businesses from Musgrave Group Plc. Qinetiq Group Plc rallied 11 percent after the U.K. defense specialist posted annual earnings that beat estimates.
Raiffeisen Bank International AG slid 2.8 percent after reporting first-quarter profit that nearly halved. Banca Monte dei Paschi di Siena SpA declined 3.1 percent after saying investors can exercise rights to buy new shares for about three weeks starting May 25.
Investors are also watching developments in Greece, with the country’s prime minister due to engage with European leaders at a meeting in Riga, Latvia, on Thursday. The ASE Index rose
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