Bloomberg News

European Stocks Extend Weekly Advance as Syngenta, SAP Rally

October 14, 2011

Oct. 14 (Bloomberg) -- European stocks climbed, extending the Stoxx Europe 600 Index’s longest stretch of weekly gains in six months, as Group of 20 finance ministers meet in Paris to discuss the euro area’s debt crisis.

Syngenta AG led chemical makers higher, rising more than 1 percent after posting third-quarter sales that beat analysts’ estimates. SAP AG rallied 2.1 percent after the software maker reported higher earnings. Xstrata Plc led mining shares higher as copper rebounded in London.

The Stoxx 600 rose 0.8 percent to 238.51 at the close in London, extending its weekly advance to 2.8 percent for a third week of gains amid optimism euro-area policy makers will contain the region’s debt crisis. The gauge has still fallen 18 percent from its high on Feb. 17.

“There is a better feel to the market,” said Paul Coffin, a fund manager at Fieldings Investment Management Ltd. in London. “Stock valuations are quite low and bonds are looking a tad expensive. We’ve seen a good rally, but if Europe doesn’t show a big enough gun, it could turn out to be a case of better to travel than arrive.”

G-20 finance ministers and central bankers meet in Paris today and tomorrow to outline a euro-area rescue plan that may include deeper investor losses on Greek bonds and increased firepower for the International Monetary Fund. Leaders may complete the plan at an Oct. 23 summit in Brussels to present to a gathering of G-20 chiefs Nov. 3-4.

Spain Credit Downgrade

Stocks climbed today even after Standard & Poor’s downgraded Spain’s credit rating for the third time in three years as slowing growth and rising defaults threaten banks.

The rating company reduced Spain’s ranking by one level to AA-, S&P’s fourth-highest investment grade, with the outlook remaining negative, in a statement late yesterday.

National benchmark indexes rose in all 18 western European markets except Iceland and Denmark. The U.K.’s FTSE 100 Index rose 1.2 percent and Germany’s DAX Index gained 0.9 percent. France’s CAC 40 Index advanced 1 percent.

Syngenta increased 1.3 percent to 268.20 Swiss francs after the world’s largest maker of agricultural chemicals reported third-quarter sales of $2.7 billion. That beat the average of six analysts’ estimates of $2.5 billion. The company also said momentum in sales volume continued into the fourth quarter with no drop-off in orders.

Wacker Chemie AG rallied 3.3 percent to 76.01 euros. Clariant AG, which said it raised 365 million euros ($506 million) by issuing three-year certificates, climbed 3 percent to 9.69 francs. Yara International ASA advanced 3 percent to 250.40 kroner.

SAP, Xstrata Advance

SAP gained 2.1 percent to 41.40 euros after the largest maker of business-management software said earnings and sales rose in the third quarter on rising demand for its services.

Operating profit, based on non-international financial reporting standards, rose 23 percent to 1.13 billion euros. Sales on that basis increased 12 percent to 3.41 billion euros.

Xstrata led mining shares higher, climbing 3.1 percent to 974.1 pence. Antofagasta Plc advanced 3.7 percent to 1,118 pence and Rio Tinto Group gained 1.9 percent to 3,345.5 pence.

Copper rebounded in London, climbing as much as 3.7 percent after customs figures yesterday showed imports of the metal into China, the world’s largest consumer, reached a 16-month high. Zinc, tin and nickel also advanced.

BowLeven Plc soared 60 percent to 120.75 pence, its biggest gain since 2009, after the U.K.-listed oil explorer focused on Africa said it discovered oil from an exploration well. The Sapele-3 well in the Douala Basin at the Etinde permit encountered 11 meters of net pay and the reservoir appears to be of “good quality,” the company said.

Sulzer, UPM-Kymmene

Sulzer AG paced declining shares, falling 8.8 percent to 94.10 francs after the Swiss maker of pumps predicted a slowdown in order growth for the full year as customers hesitate to invest amid rising economic uncertainty.

UPM-Kymmene Oyj dropped 6.1 percent to 8.80 euros after Europe’s second-largest papermaker reversed its full-year earnings forecast and predicted operating profit will fall rather than rise.

UPM said it cut its projection for operating profit excluding one-off items because of declines in pulp and fine- paper deliveries in Europe.

Finmeccanica SpA lost 1.4 percent to 5.32 euros after HSBC Holdings Plc lowered its recommendation for Italy’s biggest military contractor to “underweight” from “neutral.”

--With assistance from Corinne Gretler in Zurich. Editor: 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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