European Stocks Climb for a Second Week as Greece Concern Fades
March 13, 2010, 2:41 AM ESTBy Sarah Jones
March 13 (Bloomberg) -- European stocks rose for a second week, sending the Stoxx Europe 600 Index to the highest level in more than seven weeks, as concern eased that Greece will fail to contain the region’s biggest budget deficit.
Volkswagen AG’s preferred shares surged after Europe’s largest carmaker announced funding plans for the takeover of Porsche SE’s carmaking unit. Aixtron AG led technology shares higher after the company forecast higher sales.
The Stoxx 600 this week gained 0.5 percent this past week to 258.40, extending last week’s steepest advance since July. The measure retreated for the first two months of 2010 as concerns mounted over budget deficits in Greece, Spain and Portugal and as China moved to restrict lending and stop its economy overheating. The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, former European Commission President Romano Prodi said in a March 10 interview in Shanghai.
“Any signs of a solution to Greece and market tends to rally,” said London-based Henk Potts at Barclays Stockbrokers Ltd. in London, which oversees about $218 billion. “Investors are still waiting for a concrete plan before the market can truly move back to a bullish perspective.”
Greek Bailout
National benchmark indexes rose in 16 out of 18 western European markets. Germany’s DAX advanced 1.2 percent, France’s CAC 40 added 0.4 percent and the U.K.’s FTSE 100 rose 0.5 percent. Greece’s ASE Index climbed 1.6 percent, extending last week’s 8.8 percent rally.
Greece may get a 55 billion-euro ($76 billion) bailout from the EU, Kurier newspaper reported, without saying where it got the information. EU finance ministers will discuss next week whether any Greek bailout should be funded by issuing EU bonds guaranteed by euro region governments, said three people briefed on preparations for March 15-16 meetings.
Greek hospitals, airports and schools were shut and police scuffled with protesters on March 11 as unions staged the second general strike this year against government budget cuts to curb the European Union’s biggest deficit.
Volkswagen rallied 10 percent after the carmaker said it will seek shareholder’s approval to sell options or bonds that can be converted into VW preferred stock, reducing the likelihood of a rights offer.
Auto Shares
Porsche, the maker of the 911 sports car, jumped 6.6 percent, leading a gauge of auto shares to the biggest gain among 19 industry groups in the Stoxx 600 this week.
Aixtron jumped 8.8 percent after the maker of specialized equipment used to produce LED screens posted a 95 percent increase in full-year net income. The company said it’s targeting 2010 sales of 600 million euros to 650 million euros, compared with last year’s revenue of 302.9 million euros.
Tullett Prebon Plc jumped 14 percent after the London-based based inter-dealer broker led by Terry Smith said it’s in early talks with an undisclosed bidder that may lead to an offer. Numis Securities Ltd. analyst James Hamilton said the most likely acquirer would be a stock exchange.
Shares of rival ICAP Plc, the world’s largest broker of transactions between banks, climbed 3.5 percent.
Forth Ports Plc soared 25 percent after the operator of Scotland’s Grangemouth container port said it rejected two takeover approaches.
Barratt Developments Plc gained 10 percent amid speculation the U.K.’s biggest homebuilder by volume may receive a takeover approach from rival Persimmon Plc.
Yara International ASA rallied 6.2 percent after the world’s largest publicly traded nitrogen-fertilizer producer said it won’t increase its bid for U.S. rival Terra Industries Inc.
Genmab A/S plunged 22 percent for the biggest drop in the Stoxx 600 this week. The Danish biotechnology company said the experimental zalutumumab cancer drug failed to improve overall survival in a late-stage trial in patients with head and neck tumours.
--Editor: David Merritt
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.
