European Stocks Rally as Economic Optimism Eclipses HSBC's SlideBy
European stocks rose to their highest level in 14 months, boosted by gains in energy shares and data signaling a more broad-based economic recovery in the euro area.
The Stoxx Europe 600 Index added 0.6 percent at the close. Oil-and-gas shares rallied the most in two months as OPEC’s top official said the group intends to achieve full compliance with supply cuts. HSBC Holdings Plc, which has the fourth-biggest weighting on the Stoxx 600, limited the gauge’s advance. The lender slid the most since 2009 after its quarterly profit missed estimates.
- Carmakers were also among the best performers as a composite gauge of euro-area manufacturing and services unexpectedly rose to an almost six-year high. That pushed Germany’s DAX Index up 1.2 percent to its highest level since April 2015.
- Banks were the only Stoxx 600 industry group to decline, dragged lower by HSBC. Financial releases from Royal Bank of Scotland Group Plc and Barclays Plc are also due this week.
- Analysts estimate fourth-quarter earnings at lenders in the Stoxx 600 tumbled almost 17 percent in 2016.
- Among other shares active on earnings reports, John Wood Group Plc plunged 8 percent after forecasting a slide in profit margin this year.
— With assistance by Elena Popina