European Shares Rise With Miners as Faith in Central Banks Holds

  • Daimler, Volkswagen lead carmakers as euro falls versus dollar
  • Strategists cut expectations for European stock performance

European Close: Freenet Takes Stake in Sunrise

European stocks advanced with mining companies amid investor confidence that central-bank willingness to support global growth will bear fruit.

Anglo American Plc and Glencore led a rebound in resource-related stocks. Daimler AG and Volkswagen AG pushed carmakers higher as a weaker euro boosted earnings prospects. Standard Chartered Plc led a measure of banks to its first daily advance since Monday.

The Stoxx Europe 600 Index rose 0.3 percent to 341.71 at the close of trading. The equity gauge rebounded as much as 14 percent since a Feb. 11 low amid a rally in banks and miners, and central-bank steps to spur growth. This week’s scaling back by the Federal Reserve of expectations for interest rate increases complemented a wave of monetary easing that saw Norway cut borrowing costs and Switzerland hold rates at record lows, a week after the European Central Bank boosted stimulus.

“We’ve finally seen some light at the end of the tunnel,” said William Hobbs, head of investment strategy at Barclays Plc’s wealth-management unit in London. “Central banks will remain accommodative. Better economic prospects in different parts of the world signal that this may at some point happen in Europe.”

Still, lingering uncertainty over corporate earnings has restrained progress, and the Stoxx 600 posted its first weekly decline in five. Strategists have slashed expectations for European stocks, painting the gloomiest annual outlook in five years. The Euro Stoxx 50 Index is forecast to advance 1 percent by the end of 2016. Only a few months ago, those same strategists were calling a 12 percent rally. 

Among stocks moving on corporate news, Salvatore Ferragamo SpA added 3.1 percent after the Italian luxury-shoe maker posted better-than-expected full-year earnings and predicted another positive year.

Assicurazioni Generali SpA slid 1.7 percent after reporting worse-than-estimated net income. Berkeley Group Holdings Plc fell 2.2 percent after London’s biggest homebuilder reported a drop in reservations, even as it forecast the year’s results to reach the top end of expectations.

Abengoa SA slipped 4.2 percent after the Spanish renewable energy company seeking to avoid insolvency asked financial creditors for a seven-month standstill to help it restructure 9.4 billion euros ($10.6 billion) of debt. Home Retail Plc tumbled 9.9 percent after Steinhoff International Holdings NV said it wouldn’t make an offer for the U.K. retailer.

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