Banks Lead Europe Stocks Up 3rd Day in Calmest Market in a Yearby
European equities climbed for a third day, with investor confidence slowly coming back amid the calmest market in more than a year.
The Stoxx Europe 600 Index rose 0.4 percent at the close of trading. A gauge of banks reached its highest level since the U.K. referendum on European Union membership, with Italy’s UniCredit SpA up 8 percent, while Commerzbank AG and UBS Group AG added at least 2.9 percent. At the same time, a measure of volatility is recording its lowest monthly average since March 2015.
European equities are recovering after their biggest weekly slide in two months. The Stoxx 600 came close to the level it reached on Aug. 11, its highest since May, amid a rebound that pushed most of its industry groups higher on Wednesday. The gains are coming as investors await more clarity on the path of Federal Reserve interest-rate increases, with Fed Chair Janet Yellen speaking on Friday at the annual monetary policy symposium in Jackson Hole, Wyoming.
“It’s a good time for opportunistic investors,” said Pierre Mouton, a fund manager who helps oversee about $8.5 billion at Notz, Stucki & Cie. in Geneva. “A lot of prices were just too depressed and some people are clearly taking advantage of that. But it’s not like everyone is going on a full-risk on mode -- they’re just testing the market for now. There’s a lot coming up on the agenda.”
The rally that lifted the Stoxx 600 as much as 12 percent since the Brexit vote was halted last week as concerns resurfaced over the European Central Bank’s ability to spur growth amid political turmoil and a banking crisis in Italy. A Bank of America Corp. report showed investors withdrew money from the region’s equity funds for a record 28th straight weeks.
Economic data, though, have been beating forecasts, showing resilience after the U.K. decided to leave the EU. Euro-area figures for the services and manufacturing industries had the best reading in seven months on Tuesday, and Wednesday reports showed trade helped drive economic growth in Germany. The nation’s DAX Index added 0.3 percent, trimming its annual drop to 1.1 percent.
The Stoxx 600’s advance took its three-day gain to 1.4 percent, the most in almost two weeks. While most industry groups climbed, commodity producers fell as oil resumed a slide, and Glencore Plc lost 3.1 percent after reporting a plunge in first-half earnings.
Among other stocks moving on corporate news, advertising magnate WPP Plc contributed the most to gains on a gauge of media shares, rising 1.9 percent after posting better-than-expected first-half sales. Sweden’s Svenska Cellulosa AB surged 7.4 percent after saying it will split into two listed companies spanning hygiene goods and forestry products. Mediaset SpA advanced 1.7 percent after a report that at least two Chinese broadcasters are considering its Premium pay-TV dossier.