European Stocks Rise as Euro-Area Manufacturing Beats Estimates

  • Commerzbank advances as profit jumps, CEO prepares to leave
  • Chinese output reports show contraction continued in October

Oct. Best Month for European Equities in Six Years

European stocks advanced as better-than-expected manufacturing in the region outweighed disappointing Chinese output data.

Commerzbank AG rose 6.6 percent after the German lender said quarterly earnings increased by 25 percent, while Chief Executive Officer Martin Blessing prepares to leave the company. HSBC Holdings Plc fell 0.8 percent as RBC Capital said that the bank’s decline in income will lead analysts to downgrade their estimates. Rio Tinto Group and BHP Billiton Ltd. lost at least 1.4 percent, dragging a gauge of miners to among the worst performers of the 19 industry groups on the Stoxx Europe 600 Index as commodity prices slid.

The Stoxx 600 climbed 0.3 percent to 376.75 at the close of trading, reversing a loss of as much as 0.7 percent. Shares extended gains earlier as a Markit Economics release showed output in the euro area unexpectedly accelerated in October as German companies fared better than initially reported. China’s official purchasing managers index contracted last month, missing estimates and rekindling concern about growth and demand in the world’s second-largest economy.

“It’s based on the PMIs that came out this morning -- some came stronger, so I think that’s the main reason for the strength,” said Guillermo Hernandez Sampere, who helps manage about 150 million euros ($168 million) as head of trading at MPPM EK in Eppstein, Germany. “It’s not all over Europe, but Germany and Italy have very positive economic data, so this will help all European markets for the time being. I think it’s a confirmation that the trend for the rest of the year is to the upside.”

The Stoxx 600 posted its best monthly rally in six years in October after President Mario Draghi said the European Central Bank will consider additional easing in December, and China increased stimulus measures. The equity gauge’s rebound from a quarterly rout has been led by gains in carmakers, miners and energy producers -- the groups most battered in the selloff.

Alpha Bank AE and Eurobank Ergasias SA each soared 29 percent today after Greece’s government set the terms for helping domestic lenders plug a 14.4 billion-euro shortfall in their books identified by the ECB.

Among other stocks moving on corporate news, Electrolux AB slipped 5.4 percent after the U.S. Justice Department rejected a proposal to resolve a government lawsuit seeking to block the $3.3 billion takeover of General Electric Co.’s household-appliance business.

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