European Stocks Cap Longest Rally in Six Weeks; Nestle Advancesby and
Stoxx 600 has struggled to break out of range in past month
Burberry falls after forecasting sales drop at wholesale unit
European stocks rose for a fifth day, matching their longest winning streak since March, as Nestle SA led food and beverage shares higher.
Nestle rose 2 percent after the world’s biggest food company reported first-quarter sales that beat analysts’ estimates. Hays Plc climbed 7.3 percent after the U.K. recruitment agency said quarterly net fees grew by 10 percent or more in 17 countries.
The Stoxx Europe 600 Index added 0.3 percent to 343.99 at the close of trading, less than a point away from a two-month high reached on March 14. The benchmark earlier erased a decline of 0.4 percent to rise as much as 0.4 percent. It jumped the most in a month yesterday amid a surge in banks and optimism that China’s economy is stabilizing.
“The focus is the earnings season,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. “After the recent rebound in markets there are certainly some notable clouds in the sky and I would expect markets to zigzag. We’ve seen stabilization in macro data in China, but stabilization is one point, re-acceleration is another.”
Stocks have struggled to gain fresh impetus after rebounding as much as 14 percent from a Feb. 11 low. The Stoxx 600 has traded in a tight range in the past month amid renewed concern over the prospects for global growth.
Banks, the worst performers this year, reversed earlier declines to complete a fifth day of gains, following yesterday’s biggest surge since 2011. Italian lenders led the advance, with Banco Popolare SC and UniCredit SpA up more than 3.1 percent.
Investors are assessing earnings reports for clues on corporate health, after Alcoa Inc. kicked off the U.S. reporting season this week. Analysts now forecast profit at Stoxx 600 companies will shrink in 2016, reversing earlier calls for growth.
Burberry slid 3.6 percent after forecasting a revenue drop at its wholesale unit in the first half of the year. ASM International NV lost 4.7 percent after peer Taiwan Semiconductor Manufacturing Co. forecast quarterly sales below analyst estimates.