European Stocks Rise to Six-Week High; Xstrata, Kazakhmys Surge
March 03, 2010, 12:15 PM ESTBy Sarah Jones
March 3 (Bloomberg) -- European stocks climbed to a six- week high as basic-resource producers rallied with metal prices and Greece announced 4.8 billion euros ($6.6 billion) of additional deficit cuts.
Xstrata Plc and Kazakhmys Plc advanced more than 3 percent as copper climbed. Solarworld AG and Q-Cells SE surged at least 10 percent as the German Cabinet backed plans to cut solar subsidies by less than originally proposed. Adecco SA jumped 4 percent after the largest supplier of temporary workers said revenue trends are improving.
The Stoxx Europe 600 Index gained 0.8 percent to 252.6, the highest close since Jan. 21. The gauge fell for the first two months of the year as concern mounted over budget gaps in Greece, Spain and Portugal. Greek Prime Minister George Papandreou announced deficit-reduction measures today that include higher tobacco, alcohol and sales taxes and a cut in additional salary payments to civil servants at holidays.
“There is some temporary relief that Greece has managed to cobble together some austerity measures,” said Andrea Williams, who helps manage about $1.9 billion at Royal London Asset Management. “I still think there is support for market. Now that the European earning season is almost out of the way the market will be more reliant on economic data.”
Additional Actions
Today’s measures are the second additional actions adopted by Greece since presenting its original deficit-cutting plan to the European Commission in January and aim to ensure that the country makes good on its pledge to trim a deficit of 12.7 percent of gross domestic product to 8.7 percent this year.
National benchmark indexes rose in 14 of the 18 western European markets. The U.K.’s FTSE 100 climbed 0.9 percent, while Germany’s DAX increased 0.7 percent and France’s CAC 40 gained 0.8 percent.
Xstrata, the world’s fourth-largest copper producer, rallied 3.8 percent to 1,140 pence, leading a measure of basic- resource producers to the biggest gain among 19 industry groups in the Stoxx 600. Copper rose for a fourth day in London as a weaker dollar boosted its appeal as an alternative investment. Tin, zinc, nickel and gold also advanced.
Kazakhmys, a producer of copper in Kazakhstan, climbed 4.8 percent to 1,516 pence as Barclays Plc upgraded the shares to “overweight” from “equal weight.” Antofagasta Plc, which was raised to “equal weight” at Barclays, increased 3.7 percent to 967.5 pence.
Renewable-Energy Stocks
Solarworld led renewable-energy shares higher as German ministers agreed to cut subsidized rates by 16 percent for new rooftop solar systems and by 15 percent for solar parks built after July 1, less than the 25 percent originally proposed for parks. The plan, agreed on by coalition lawmakers last month, still has to be approved by the German parliament.
“The timing of the reductions is better than anticipated under the Environment Ministry’s previous proposal,” Citigroup Inc. analyst Andrew Benson wrote in a report. “Importantly, the cuts have been postponed to July for rooftop systems, rather than April, which should spur strong demand” in the second quarter.
Solarworld jumped 13 percent to 10.66 euros and Q-Cells climbed 10 percent to 7.42 euros. Renewable Energy Corp. ASA, the Norwegian maker of solar-energy components, advanced 7.3 percent to 22.91 kroner.
Gamesa, Adecco
Gamesa Corp. Tecnologica SA, Spain’s largest producer of wind turbines, soared 6.3 percent to 9.49 euros after General Electric Co., the world’s second-biggest wind-turbine maker, said it expects global industry-wide sales for land-based turbines to grow by $130 billion in the next two years.
Adecco gained 4 percent to 56.7 Swiss francs after the company said revenue trends were improving as economies emerging from the recession. The company posted a fourth-quarter profit of 42 million euros, compared with a loss of 22 million euros a year earlier.
Standard Chartered Plc climbed 5.3 percent to 1,674 pence. The British bank that makes more than 90 percent of pretax earnings in Asia posted a record profit for 2009 said it will raise as much as $750 million by selling shares in India.
Arriva Plc rallied 6.2 percent to 563 pence, a 14-month high. The operator of Britain’s longest rail route said full- year net income increased 3.8 percent to 108.5 million pounds ($164 million) and boosted its final dividend by 5 percent to 18.8 pence.
Neste Oil Oyj, Finland’s only oil refiner, gained 5.3 percent to 11.36 euros after 10,000 drivers who transport fuel in the Nordic country ended a one-day old strike.
Adidas AG sank 4.1 percent to 36.47 euros, the most since August. The world’s second-largest sporting-goods maker reported a 64 percent drop in fourth-quarter profit to 19 million euros because of weaker sales and writedowns in the company’s China business. That missed the average 27.6 million- euro estimate in a Bloomberg survey.
Puma AG, the second-biggest European sporting-goods maker, slipped 2.4 percent to 218.55 euros.
--With assistance from Francine Lacqua in London and Adria Cimino in Paris. Editors: Andrew Rummer, David Merritt.
To contact the reporter on this story: Sarah Jones at sjones35@bloomberg.net.
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.
