Bloomberg News

European Stocks Rise as Ministers Debate Insuring Bond Issuance

November 30, 2011

Nov. 29 (Bloomberg) -- European stocks advanced for a third day as euro-area finance ministers met to discuss insuring a portion of bonds issued by debt-stricken countries and U.S. consumer confidence unexpectedly rose in November.

BASF SE and K+S AG pulled a gauge of chemical makers higher, rising more than 2 percent. IG Group Holdings Plc rallied the most since 2010. Colruyt SA, Belgium’s biggest discount-food retailer, plunged to a four-year low after reporting worse-than-estimated fiscal first-half profit.

The Stoxx Europe 600 Index gained 0.8 percent to 231.68 at the close. The Stoxx 600 rallied 3.8 percent yesterday amid speculation the euro area’s policy makers are intensifying their efforts to contain the region’s debt crisis.

“The finance-minister meeting today will be observed carefully,” said Trung-Tin Nguyen, a hedge-fund manager at TTN AG in Zurich. “There is hope, along with increasing pressure, for indicative measures to be implemented. The Italian auction went better than expected, so that gives the market support as well.”

Finance ministers from the 17-member monetary union met in Brussels to debate using their bailout fund, the European Financial Stability Facility, to insure sovereign debt with guarantees.

President Barack Obama said agreeing on a sufficient response to Europe’s problems is of “huge importance” to the U.S., after meeting yesterday with European Union President Herman Van Rompuy and European Commission President Jose Barroso.

Euro-Area Integration

“We’ve got a stake in their success, and we will continue to work in a constructive way to try to resolve this issue in the near future,” Obama said at the White House after the annual U.S.-EU summit. Barroso said that “no one in Europe” is discussing a breakup and that “everybody is speaking” of further integration among euro-area states.

Italian 10-year bonds fell, pushing yields for the benchmark securities toward euro-era records as the country sold 7.5 billion euros ($10 billion) of debt maturing in 2014, 2020 and 2022.

In the U.S., consumer confidence climbed in November by the most in more than eight years as Americans grew more upbeat about their employment and income prospects. The Conference Board’s index increased to 56 from a revised 40.9 reading in October, the biggest monthly gain since April 2003, figures showed today. The gauge, at a four-month high, exceeded the most-optimistic forecast in a Bloomberg News survey of economists.

Benchmark Indexes

National benchmark indexes rose in 14 of the 18 western- European markets. France’s CAC 40 Index and the U.K.’s FTSE 100 Index climbed 0.5 percent, while Germany’s DAX Index advanced 1 percent.

BASF, the world’s largest chemical company, climbed 2.1 percent to 50.56 euros after the company raised its sales target for the end of this decade as Chief Executive Officer Kurt Bock laid out his strategy after seven months in charge.

K+S, Europe’s biggest potash supplier, increased 3 percent to 39.46 euros. The company will develop a Canadian mineral deposit that it acquired this year.

IG Group jumped 9.3 percent to 474 pence, its biggest rally since June 2010, after forecasting first-half revenue of more than 193 million pounds ($301 million), at least 23 percent higher than a year earlier.

G4S Plc, the world’s largest security company, rose 3.2 percent to 246.8 pence after Alex Magni, an analyst at HSBC Holdings Plc upgraded the stock to “overweight” from “neutral.”

Remy Cointreau, Oriflame

Remy Cointreau SA, the maker of Remy Martin cognac, climbed 2.9 percent to 61.90 euros after the company forecast “a substantial increase” in full-year earnings. Remy Cointreau also posted first-half current operating profit that jumped 27 percent to 106.2 million euros, topping analysts’ estimates.

Oriflame Cosmetics SA, the Swedish maker of cosmetics, surged 7 percent to 207.70 kronor after Svenska Handelsbanken AB raised the company’s shares to “buy” from “accumulate.”

Balfour Beatty Plc jumped 5.1 percent to 241.7 pence as its Parsons Brinckerhoff unit won a 104 million-pound five-year contract from Qatar’s government.

Colruyt plunged 8 percent to 27.22 euros after reporting a steeper-than-estimated drop in fiscal first-half profit as its expansion in France turned unprofitable because of price cuts and accelerated store openings. The company said its forecast for full-year profit close to last year’s 338 million euros “remains a challenge.”

Lloyds, KBC Groep

Lloyds Banking Plc dropped 2.1 percent to 23.2 pence and KBC Groep NV fell 6.9 percent to 8.32 euros as a gauge of European banks was the worst performer of the 19 industry groups in the Stoxx 600.

The European Central Bank failed to fully offset the extra liquidity created by its bond purchases for the first time in seven months, a sign of mounting tension among euro-area banks.

Transocean Ltd., the world’s largest offshore oil driller, slumped 8.7 percent to 39.20 Swiss francs after announcing it will sell shares to help refinance its acquisition of Aker Drilling ASA.

--With assistance from Peter Levring in Copenhagen. Editors: Will Hadfield, Srinivasan Sivabalan

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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


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