Bloomberg News

European Stocks Climb; Greek Banks Rise as Carrefour Shares Slip

June 17, 2011

June 17 (Bloomberg) -- European stocks gained as German Chancellor Angela Merkel retreated from demands that bondholders shoulder a “substantial” part of the cost of a Greek rescue.

National Bank of Greece SA soared 8.5 percent. Banca Popolare di Milano Scrl jumped 12 percent following a report that BNP Paribas SA made an offer for the bank. Carrefour SA lost 1.7 percent after saying results in France failed to meet the company’s own expectations.

The Stoxx Europe 600 Index rose 0.2 percent to 267.17 at the 4:30 p.m. close in London, trimming the gauge’s drop this week to 0.4 percent. The benchmark gauge has declined for seven consecutive weeks, its longest losing streak since 2008, as concern mounted that Greece will default on its debt. Volatility was unusually high today as index options expired throughout the region.

“The fact that Germany is getting more involved is helping the market,” said Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, which oversees about $110 million. “It’s a relief. Takeover rumors also are helping stocks. With weak valuations, there are clearly buying opportunities.”

Greek Prime Minister George Papandreou fired his finance minister in a Cabinet overhaul aimed at fending off a rebellion from within the ruling Pasok party and ensuring the passage of austerity measures needed to qualify for a bailout. European stocks fell to a three-month low yesterday after Papandreou said he would reshuffle the Cabinet and seek a confidence vote.

Merkel, Sarkozy Meeting

European stocks rallied as Merkel signaled her willingness to compromise on German demands that bondholders shoulder a “substantial” share of a Greek rescue, saying she’ll work with the European Central Bank to resolve the Mediterranean nation’s sovereign-debt crisis.

“We would like to have a participation of private creditors on a voluntary basis,” Merkel told reporters in Berlin today at a joint press conference with French President Nicolas Sarkozy. “This should be worked out jointly with the ECB. There shouldn’t be any dispute with the ECB on this.”

Sarkozy said a “breakthrough” had been made on the Greek debt crisis, following his meeting with Merkel.

Greece’s ASE Index surged 3.8 percent, the largest gain of 17 West European markets trading today. National Bank of Greece, the country’s largest lender, jumped 8.5 percent to 4.75 euros, while EFG Eurobank Ergasias soared 9.3 percent to 3.17 euros. Alpha Bank SA rallied 6.4 percent to 3.32 euros.

National benchmark indexes rose in all but one of the western European markets trading today. France’s CAC 40 Index and Germany’s DAX Index climbed 0.8 percent and the U.K.’s FTSE 100 Index increased 0.3 percent.

U.S. Leading Indicators

In the U.S., the Conference Board’s gauge of leading indicators, which measures the outlook for the next three to six months, rose 0.8 percent. That beat the average economist forecast for an increase of 0.3 percent, according to the median estimate in a Bloomberg News survey.

Banca Popolare di Milano soared 12 percent to 1.76 euros. BNP Paribas SA was reported to have made an all-cash offer to buy the Italian lender by Finanza & Mercati. The newspaper didn’t say where it got the information. Popolare di Milano said it wasn’t aware of any offer from the French lender. A Rome- based spokesman for BNP Paribas didn’t immediately return calls from Bloomberg.

Carrefour sank 1.7 percent to 27.29 euros after the world’s second-largest retailer by sales said first-half results fell short of management’s expectations.

Celesio, Yara Fall

Celesio AG plunged 15 percent to 12.74 euros after Europe’s biggest drug wholesaler said profit may fall this year as “government measures” across the continent and increased competition in Germany hurt results.

Yara International ASA, the largest maker of nitrogen fertilizers, slid 2.6 percent to 305.20 kroner. The U.S. Senate voted to eliminate a tax credit and a tariff that subsidized ethanol production.

Zodiac Aerospace jumped 5.6 percent to 57.57 euros. The French maker of seats, galleys, toilets and baggage storage compartments for commercial aircraft reported nine-month sales of 2.02 billion euros ($2.9 billion), up from 1.55 billion euros a year earlier, the company said.

--Editor: Will Hadfield

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net.


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