European Stocks Are Little Changed as Monte Paschi Gains
European stocks were little changed, completing a third monthly gain, as a report showed unemployment in the euro area fell from a record high.
Kesko Oyj, Finland’s biggest publicly traded retailer, rallied 8.8 percent. Banca Monte dei Paschi di Siena SpA (BMPS) added 1.5 percent as Italy’s third-largest lender set out a plan to return to profit after cutting costs and raising capital as part of its restructuring plan. Speedy Hire Plc sank the most since 2009 after the construction-equipment leasing company said it found evidence of false accounting at one of its units.
The Stoxx Europe 600 Index slipped less than 0.1 percent to 325.16 at the close of trading in London. The equity benchmark rose 0.9 percent in November and 16 percent so far this year as central banks around the world committed to leave interest rates near record lows. The gauge has gained 0.7 percent this week.
“With the short trading day in the U.S. and the Thanksgiving holiday, volume is low and there aren’t many impulses for big moves before next week,” said Patrick Kraehenbuehl, a portfolio manager at Umblin AG in Zurich. “Sentiment is still very positive, with investors keeping an eye on economic data and many betting on a year-end rally.”
The volume of shares changing hands in companies listed on the Stoxx 600 was 14 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
A Eurostat report showed that euro-area unemployment unexpectedly fell in October. The jobless rate declined to 12.1 percent from 12.2 percent in September. Economists had predicted it would remain at a record high.
S&P raised its outlook for Spain’s debt to stable from negative, reducing the likelihood that the ratings company will cut the Mediterranean nation’s rating to junk. S&P affirmed Spain at BBB-, its lowest investment grade.
The ratings company raised its score for Cyprus to B- from CCC+. It lowered the Netherlands to AA+ from AAA, citing weaker growth prospects than previously forecast.
Kesko jumped 8.8 percent to 27.47 euros, its highest price since February 2012. The company said it plans to sell some of its store sites and shopping malls to a real estate investment trust that it will set up in 2014. The trust, which Kesko will partly own, will hold assets in Finland, Sweden and Russia.
Monte Paschi rose 1.5 percent to 18.7 euro cents. The lender said it will target net income of 200 million euros ($272 million) in 2015 and 900 million euros in 2017 after losing 8,000 staff, selling 3 billion euros of new shares and shrinking its balance sheet by 25 percent. Monte Paschi’s plan, which received European Union approval on Nov. 27, would allow it to repay 4.1 billion euros of state aid by 2017.
Credit Agricole SA (ACA) advanced 3.2 percent to 9.23 euros. UBS AG added the lender to its key-call list, saying that its record at generating retained earnings outweighed concern that its capital remains too low. Barclays Plc and Credit Suisse Group AG gained 2.3 percent to 271.7 pence and 0.7 percent to 26.98 Swiss francs, respectively.
K+S AG rallied 6.1 percent to 20.59 euros. The German potash producer told analysts that prices for the crop fertilizer may increase in 2014, according to MainFirst Bank AG. Almost 18 percent of the company’s shares are out on loan, according to data from Markit. Short sellers profit by selling shares they have borrowed in the expectation that they can buy them back at a lower price.
Rentokil Initial Plc (RTO) climbed 3.2 percent to 106.1 pence as Bank of America Corp. upgraded the U.K. pest-control and hygiene-services company to buy from neutral. The brokerage predicted that cash flow will improve in 2014 and 2015.
Speedy Hire slumped 22 percent to 50.5 pence. The company said late yesterday that it had found accounting irregularities within its international business, which mostly operates in the Middle East. Speedy Hire forecast that the irregularities will reduce pretax profit for the financial year ending March 31 by about 3 million pounds ($4.9 million).
Steve Corcoran resigned as chief executive officer. He will stay with the company until it finds a successor, according to a statement.
UPM-Kymmene Oyj (UPM1V) fell 3.6 percent to 12.23 euros. UBS lowered Europe’s second-largest papermaker to sell from neutral. The brokerage said that demand for the company’s product will not recover in Europe and that the industry will probably reduce its capacity next year.
TeliaSonera AB dropped 1.7 percent to 53.55 kronor, its biggest retreat in 12 weeks. Sweden’s largest phone company fired Chief Financial Officer Per-Arne Blomquist and three other senior employees as the fallout mounted from an ethics review. The company said in a statement today that its processes when it made acquisitions in former Soviet countries had fallen short of sound business practices.
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