European Stocks Advance on Day of Ups and Downs as Autos Climb

  • Auto-related shares post biggest advance on Stoxx 600
  • German exports miss estimates, decline most since January 2009

On a day when Europe’s equity benchmark swung between gains and losses at least 25 times, an advance in carmakers helped it close higher.

Auto-related shares posted the best performance of the 19 industry groups on the Stoxx Europe 600 Index, rising for a fourth day. Daimler AG added 1.2 percent. Fiat Chrysler Automobiles NV rose 3.9 percent after reaching a tentative agreement with the United Auto Workers union in the U.S. to avert a strike. Credit Suisse Group AG led banks lower, sliding 3.6 percent after the Financial Times reported that the Swiss lender is preparing a substantial capital raising plan.

“There’s a certain recovery after the selloff that we’ve seen in the sector after the ‘diesel-gate’ which sent the shares down,” said Marc-Rene Tonn, a Hamburg-based analyst with Warburg Research. “People are looking at value in the sector again.”

The Stoxx 600 added 0.2 percent to 361.61 at the close of trading, after earlier rising as much as 0.3 percent and falling 0.6 percent. The gauge also struggled to sustain an intraday advance yesterday, after rallying the previous two sessions. Investors are awaiting company earnings announcements and minutes of the Federal Reserve’s September meeting -- due after market close -- for further cues on corporate and economic health. The equity measure had tumbled as much as 18 percent from an April record through Sept. 29 amid uncertainty over the trajectory of U.S. borrowing costs and China-fueled worries about global growth.

Shares fell earlier after a report showed that German exports slumped in August the most since January 2009, evidence that Europe’s largest economy isn’t immune to the effects of weakening global trade. In a further sign of euro-area strain, French business confidence unexpectedly worsened.

“The data in Europe is softening, so that’s putting a drag on European stocks,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “We had some pretty bad export numbers from Germany.”

Among stocks moving on corporate news, Koninklijke DSM NV rose 4.1 percent after ABN Amro Group NV upgraded its rating on the life sciences company to buy from sell, citing expectations of improved earnings.

Telefonica SA contributed the most to a decline in a gauge of telecommunications stocks, retreating 1.3 percent after U.K. regulators reportedly expressed concern that the sale of its O2 unit could lead to a decline in service and higher prices. 

Coloplast A/S fell 4.1 percent after UBS Group AG cut its recommendation to sell from neutral, citing overly optimistic estimates for growth in two of the company’s main businesses. 

Seadrill Ltd dropped 5.3 percent after the offshore driller’s chief executive officer said 2016 would be “ugly,” with a recovery possibly starting in 2017 depending on oil prices. Norsk Hydro ASA fell 2.5 percent. 

Deutsche Bank AG lost 1.8 percent. Shares swung between gains of as much as 3.1 percent and a 3.6 percent loss as investors weighed the potential elimination of its dividend against the likelihood that such a move would allow the lender to overhaul its structure without seeking more capital from shareholders.

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