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European Stocks Rise on China Help; BNP, Heineken Gain on Profit

By Tom Stoukas

February 16, 2012

The Stoxx Europe 600 Index added 0.6 percent to 264.16 at the close of trading, paring an earlier gain of 1 percent amid speculation a Greek aid package could be delayed until after April elections. The gauge has rallied 8 percent this year as U.S. economic data improved and optimism grew that the euro area will contain its sovereign-debt crisis.

“China has pledged to contribute to the bailout fund, which not only could increase the firepower available but might also persuade other countries like Japan, Russia, oil-rich states and possibly even the U.S. to actively take part in combating the crisis,” said Markus Huber, head of German sales trading at ETX Capital in London.

China offered to invest in Europe’s bailout funds and sustain its holdings of euro assets. The commitment offers an incentive to European finance ministers, who are increasing pressure on Greece to deliver budget cuts in exchange for a second bailout.

China Assistance

“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan said in a speech in Beijing today. “We would participate in resolving the euro debt crisis,” he said, echoing comments by Premier Wen Jiabao yesterday.

National benchmark indexes gained in 12 of the 18 western European markets today. France’s CAC 40 and Germany’s DAX rose 0.4 percent each, while the U.K.’s FTSE 100 slipped 0.1 percent. Greece’s ASE sank 5.1 percent for the biggest two-day decline since November as National Bank of Greece SA tumbled 11 percent.

Euro-area finance ministers postponed a decision slated for tonight on Greek aid totaling 130 billion euros ($171 billion) until at least Feb. 20 and possibly until after a full-time government emerges from the nation’s elections later this year. Greek Finance Minister Evangelos Venizelos said that Europe’s wealthier countries are “playing with fire” by toying with the idea of expelling it from the euro area.

Economy Shrinks

Europe’s economy shrank less than economists forecast in the fourth quarter after better-than-predicted performance in Germany and France. Gross domestic product in the 17-nation euro area fell 0.3 percent from the prior three months, the first drop since the second quarter of 2009, the European Union’s statistics office said today.

BNP Paribas rallied 4.1 percent to 34.89 euros as fourth- quarter net income declined to 765 million euros from 1.55 billion euros a year earlier. That beat the 587 million-euro average estimate of 10 analysts surveyed by Bloomberg.

Bank shares were the top gainers in the Stoxx 600, adding 1.7 percent as a group. Societe Generale SA rose 2.2 percent to 22.38 euros after three days of losses, while HSBC Holdings Plc increased 2.6 percent to 575.9 pence. Banca Monte dei Paschi di Siena SpA rallied 11 percent to 33.64 euro cents and UniCredit SpA climbed 2.2 percent to 4.16 euros.

Heineken advanced 3.7 percent to 37.90 euros after the brewer reported increased annual profit and unveiled new cost- saving targets. Earnings before interest and taxes in 2011 rose 2.8 percent to 2.7 billion euros, excluding some one-time items, the Amsterdam-based maker of Amstel said.

Clariant Climbs

Clariant gained 5.7 percent to 13.1 Swiss francs after saying it may sell or find other strategic options for business units generating 1 billion francs ($1.09 billion) in revenue as it moves away from commodity products. Finding the right option for the textile-chemical, paper specialties and emulsions units is a mid- to long-term goal, the Muttenz, Switzerland-based company said today.

Danone advanced 1.9 percent to 49.91 euros, the highest since October. The world’s biggest yogurt maker reported a 4.5 percent gain in 2011 earnings, helped by growth in infant nutrition and bottled water products.

TUI AG, the owner of Europe’s largest travel company, rose 3.5 percent to 6.43 euros after saying it will sell a stake in Hapag-Lloyd and may dispose of its remaining holding in the shipper in an initial public offering.

ING Increases

ING Groep NV added 2.2 percent to 6.71 euros. Capital One Financial Corp.’s planned purchase of ING’s U.S. online bank won approval from the Fed, clearing the way for the credit-card lender to add about $80 billion in deposits.

Puma SE rose 3.1 percent to 247.25 euros after Europe’s second-largest sporting goods maker reported profit that beat analysts’ estimates and its own projection and forecast growth in sales and earnings in each of the next two years. Rival Adidas AG gained 2.6 percent to 59.26 euros.

TomTom NV, Europe’s biggest maker of portable navigation devices, soared 7.1 percent to 4.20 euros after saying it plans to introduce the HD Traffic service to China.

National Bank of Greece, the country’s largest lender, sank 11 percent to 2.54 euros, dropping for a second day. Alpha Bank SA and EFG Eurobank Ergasias plunged 14 percent to 1.45 euros and 16 percent to 98 euro cents, respectively.

Swisscom AG, Switzerland’s biggest phone company, fell 1.9 percent to 360.60 francs after predicting lower revenue in 2012 and posting its first quarterly loss in almost a decade on a writedown of Italian fixed-line unit Fastweb SpA.

PSA Peugeot Citroen lost 7 percent to 14.06 euros, erasing an earlier gain of 4.5 percent. The French automaker must “scale back” costs and planned investments to reduce debt, Chief Executive Officer Philippe Varin said in an interview with France’s Le Monde newspaper.

“We need to scale back because our debt has risen from 1.6 billion euros in June 2011 to 3.4 billion euros at the end of 2011, that’s far too much,” he was cited as saying.

--With assistance from Namitha Jagadeesh in London. Editors: Andrew Rummer, Srinivasan Sivabalan

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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