Bloomberg News

European Stocks Advance Most in Two Months Before Greek Vote

June 21, 2011

June 21 (Bloomberg) -- European stocks climbed the most in two months amid speculation that Greek Prime Minister George Papandreou will win a confidence vote that moves the nation a step closer to avoiding a default.

EFG Eurobank Ergasias SA led a rally in Greek banks, jumping 9 percent. Misys Plc surged 9 percent after the software provider said it has received a preliminary takeover approach. Syngenta AG rose 3.6 percent after the chemical maker said sales growth in the second quarter has been “robust.” SABMiller Plc lost 3.6 percent after Australia’s Foster’s Group Ltd. rejected its $10 billion cash offer.

The Stoxx Europe 600 Index rose 1.4 percent to 269.59 at the 4:30 p.m. close in London, the biggest gain since April 20. Since its peak on Feb. 17, the gauge has still tumbled 7.4 percent as U.S. economic data trailed forecasts, adding to concern about Europe’s debt crisis. The measure’s valuation fell to 12.6 times its companies’ reported earnings yesterday, the cheapest since 2008, according to Bloomberg data.

“There is optimism that the moves Papandreou has made will be sufficient enough to get the vote passed,” said Andrea Williams, who helps manage about 600 million pounds ($970 million) at Royal London Asset Management. “It’s one hurdle at a time for Greece. Spain’s bond issuance also seems to have gone ok which is also helping the market.”

Spanish Auction

Spain sold 3 billion euros ($4.3 billion) of debt today, compared with the Treasury’s target for a maximum of 3.25 billion euros. Stocks in Europe pared losses late yesterday after Luxembourg’s Jean-Claude Juncker assured investors that a solution will be found to Greece’s debt crisis.

Tonight’s confidence vote for Papandreou may determine whether Greece becomes the first euro-area country to default and caps a week of turmoil for the nation’s prime minster, who has fended off a revolt from the ranks of his ruling Pasok party. European Union leaders have insisted that Papandreou secure multiparty support for austerity measures that are a condition of the aid.

National benchmark indexes climbed in all 18 western European markets. France’s CAC 40 Index gained 2 percent, Germany’s DAX increased 1.9 percent and the U.K.’s FTSE 100 rose 1.4 percent.

Greece’s ASE surged 3.7 percent to its highest in two weeks. Eurobank, the nation’s second-largest lender, soared 9 percent to 3.28 euros and National Bank of Greece SA rallied 7.9 percent to 4.93 euros.

Misys Approach

Misys surged 9 percent to 418.9 pence after the provider of software for the financial industry said it has received an approach that may or may not lead to a takeover offer. In a research note this month, Jefferies Group Inc. analysts named Infosys Ltd., Tata Consultancy Services Ltd., HCL Technologies Ltd. and Temenos Group AG as possible bidders.

Syngenta rallied 3.6 percent to 278.9 Swiss francs after the world’s largest maker of farming chemicals forecast that sales of pesticides, seeds and other products to its mainstay crop markets will more than double.

Oil and gas shares had the second-biggest increase among 19 industry groups in the Stoxx 600, rising the most since February, as crude climbed for a second day in New York.

BP Plc rose 3.7 percent to 445.7 pence, the largest advance since January, after Weatherford International Ltd. agreed to pay Europe’s second-biggest oil company $75 million to cover its liability for any current or future claims related to the Macondo oil spill. Royal Dutch Shell Plc gained 2.1 percent to 2,158.5 pence.

Petropavlovsk, Nokia

Petropavlovsk Plc surged 7.6 percent to 729.5 pence, the biggest advance since November. The producer of gold in Russia said sales of the precious metal increased 64 percent through the first five months of this year as prices gained.

Nokia Oyj rallied 3.9 percent to 4.21 euros, paring yesterday’s 4.3 percent selloff, after the company unveiled the N9 smartphone in Asia to fend off competition from phones powered by Google Inc.’s Android. The company will start shipping the product later this year.

Whitbread Plc climbed 6.8 percent to 1,587 pence after the owner of Premier Inn hotels and Costa Coffee shops said total sales rose 9.2 percent in the 13 weeks ending June 2 and the first quarter was consistent with its outlook.

SABMiller slid 3.6 percent to 2,103 pence after Foster’s rejected a A$9.5 billion ($10 billion) cash offer from the London-based company as too low in what would be the biggest takeover in the industry since 2008. Foster’s surged by the most since 1986 in Sydney trading as SABMiller said it will “continue to seek engagement” with Australia’s biggest brewer.

Fortum Oyj dropped 2.6 percent to 19.99 euros, extending yesterday’s 7.6 percent slide after the Finnish government agreed to implement a windfall tax. Analysts at WestLB AG and UBS lowered their recommendations for Finland’s largest utility to “neutral.”

--With assistance from Adria Cimino in Paris. Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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