European Stocks Post Weekly Gain; Carlsberg Rises, Holcim Drops
November 14, 2011, 2:29 AM ESTBy Julie Cruz
Nov. 12 (Bloomberg) -- European stocks climbed this past week as Italy’s Senate approved austerity measures, easing concern the country will need a bailout, and U.S. consumer confidence rose in November more than economists had predicted.
Carlsberg A/S surged 16 percent after reiterating its prediction that adjusted net income will rise 5 percent to 10 percent this year. Stada Arzneimittel AG jumped 16 percent after saying the Serbian government guaranteed to settle its agencies’ bills with drugmakers. PostNL NV slid 13 percent as the biggest Dutch postal operator said profit decreased.
The benchmark Stoxx Europe 600 Index gained 0.5 percent to 240.98 this past week on optimism a new government led by former European Union Competition Commissioner Mario Monti will take charge in Italy. The Stoxx 600 will rally 14 percent to 275 through the end of next year as earnings growth supports valuations and “extreme pessimism” abates, according to Barclays Plc.
“Concerns about Europe’s debt crisis seem to be easing as Italy and Greece take measures to address on-going issues and draw a line under the situation,” said Manoj Ladwa, a senior trader at ETX Capital in London.
In Italy, the Senate in Rome voted 156 to 12 to pass the package of measures promised to the European Union in a bid to boost growth and cut Italy’s debt of 1.9 trillion euros ($2.6 trillion), the world’s fourth biggest. Opposition lawmakers did not take part in the vote, allowing the bill to pass.
Italian Senate Vote
The Senate brought forward the ballot after Prime Minister Silvio Berlusconi lost his parliamentary majority this week, leading bond yields to surge to euro-era records. The Chamber of Deputies will grant final approval to the legislation on Nov. 12 and Berlusconi will resign “a minute later,” Chamber Speaker Gianfranco Fini said.
Italy’s debt exceeds that of Greece, Spain, Portugal and Ireland combined. Unlike those nations, it has systemic importance as the world’s third-largest bond market and the eighth-biggest economy.
In Greece, a new unity government led by Lucas Papademos was sworn on Nov. 11 with a mandate to implement budget measures and decisions related to a 130 billion-euro bailout agreed on an Oct. 26. Elections may take place on Feb. 19. The new government said Evangelos Venizelos will remain as the country’s finance minister and deputy prime minister.
U.S. Consumer Confidence
In the U.S., the Thomson Reuters/University of Michigan preliminary index of consumer sentiment for November rose to 64.2 from a final October reading of 60.9. That beat the median forecast of 61.5 in a Bloomberg News survey of economists.
“Consumer confidence is improving, indicating a dislocation between consumers retail confidence and consumers financial and political system confidence,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich.
National benchmark indexes climbed in 10 of the 18 western- European markets. France’s CAC 40 Index gained 2.8 percent, the U.K.’s FTSE 100 Index rose 0.3 percent and Germany’s DAX Index jumped 1.5 percent.
Carlsberg rose 16 percent as the company kept its forecast for annual operating profit, excluding some items, of about 10 billion kroner ($1.85 billion).
Stada surged 16 percent as the Serbian government issued a letter on Nov. 10 committing itself to pay for deliveries from pharmaceutical manufacturers to government agencies, the generic-drug company said. The letter covers the next two years as well, Chief Executive Officer Hartmut Retzlaff told analysts.
Ryanair, Pirelli Jump
Ryanair Holdings Plc climbed 9.5 percent after Europe’s largest discount airline raised its full-year profit forecast by 10 percent to 440 million euros as higher ticket prices offset a slowdown in growth.
Pirelli & C. SpA gained 14 percent as Europe’s third- largest maker of tires said its operating profit margin will increase to more than 16 percent in 2015 from 8.4 percent in 2010.
Holcim Ltd., the world’s second-largest cement maker, slid 4.3 percent this week after saying third-quarter operating profit fell 12 percent to 669 million Swiss francs ($744 million). That missed the average analyst estimate of 673 million francs in a Bloomberg survey.
Construction companies lost 1.8 percent as a group this week, the worst performance of the 19 industry groups in the Stoxx 600. Bouygues SA, the French construction company with mobile-phone and media assets, declined 10 percent, while Eiffage SA lost 7.3 percent.
PostNL retreated 13 percent after the company said third- quarter operating profit fell 22 percent as its domestic mail deliveries decreased. Earnings before interest, taxes, depreciation and amortization fell to 104 million euros from 134 million euros a year earlier.
--Editor: Will Hadfield
To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
