Europe Stocks Rebound on Economy Optimism, While Bouygues Slumpsby
All but four of 19 industry groups in the Stoxx 600 advance
Stoxx 600 rebounds from its lowest level since Feb. 26
European stocks rose for the first time in three days on confidence that the strength in the U.S. economy will help global growth.
The Stoxx Europe 600 Index rose 0.4 percent at the close, paring an advance of as much as 1.1 percent. Orange SA lost 6.2 percent and Bouygues SA plunged 13 percent after a deal between the two collapsed. Peers Altice NV, Iliad SA and Numericable-SFR SAS tumbled more than 11 percent.
“In Europe most companies are doing OK,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “It’s not a perfect world, but business is not as bad as we hear all the time. The U.S. economy is stronger than many expect and that could help the rest of the world.”
The Stoxx 600 erased losses of as much as 0.6 percent on Monday as health-care companies -- which tend to perform better in times of economic turmoil -- climbed.
European shares have been particularly volatile lately, and their rebound has stalled after reaching a high on March 14. Investors skeptical of the recovery have withdrawn money from the region’s equity funds, while analysts have slashed profit-growth estimates and are now forecasting declines for 2016.
The Stoxx 600’s third weekly decline marked its longest losing streak since January, as the slide in oil prices resumed. On Friday, the benchmark index closed at its lowest level since Feb. 26, down 8.9 percent for the year. With a valuation of about 14.7 times estimated earnings, it traded at its lowest level since January 2015 relative to the Standard & Poor’s 500 Index.
“We are seeing a rebound in European markets after the recent weakness,” said Michael Kapler, an equities manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “I am more on the cautious side. There is a big question mark on earnings and global growth.”
Sanofi and Merck KGaA led an advance in drugmakers. RWE AG climbed 3.1 percent after Societe Generale SA recommended buying shares of the German utility because of potentially favorable rulings on nuclear provisions. Mediaset SpA added 2.3 percent after Citigroup Inc. said Vivendi SA will probably buy a controlling stake in the Italian company’s Premium pay-TV unit.
Greece’s ASE Index lost 1.2 percent, the most among western-European markets, after International Monetary Fund Managing Director Christine Lagarde said the IMF is “a good distance away” from an agreement that would allow for additional loans to Europe’s most indebted state.