European stocks rebounded from a three-month low as earnings from Nordea Bank AB (NDA) to Kone Oyj (KNEBV) topped analyst estimates and sales of new homes in the U.S. exceeded forecasts.
Nordea, the Nordic region’s biggest lender, rose 3.8 percent and Kone, a Finnish maker of elevators and escalators, surged 8.2 percent. TeliaSonera AB (TLSN) rallied 6.6 percent after saying it will receive 22 billion kronor ($3.3 billion) in dividends and proceeds from the sale of a stake in OAO MegaFon. Michelin & Cie. climbed 6.1 percent on increased revenue.
The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 254.37 in London. The measure has advanced 4 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Equities are stronger than in the fall, as central banks have moved to support the market with liquidity and removing the structural risks to banks, so markets should weather the recent turmoil better than last year,” said Hans Peterson, the chief investment officer of SEB Private Bank in Stockholm. “Investors are concerned about growth prospects, which may turn into a drag on the market, but that’s not the case yet.”
National benchmark indexes gained in all of the 18 western European markets, except Greece. France’s CAC 40 (CAC) rose 2.3 percent, the U.K.’s FTSE 100 increased 0.8 percent and Germany’s DAX Index added 1 percent.
The Stoxx 600 fell 2.3 percent yesterday to the lowest since Jan. 16 as reports showed that manufacturing contracted in the euro area and China and the Dutch Cabinet resigned after struggling to clinch an austerity deal. The gauge has lost 3.4 percent in April amid renewed concern that the euro-region debt crisis is yet to be contained.
The backlash against austerity in Europe has expanded, generating fresh doubts about the German-driven strategy for getting to grips with the two-year-old debt crisis. French President Nicolas Sarkozy lost the first round of his re- election bid on April 22 and Greece’s politicians are facing anti-austerity rumblings.
German Chancellor Angela Merkel won’t budge from her insistence on budget austerity in Europe as unavoidable to resolving the debt crisis, a senior lawmaker in her party said.
“The chancellor is pretty resistant to pressure,” Peter Altmaier, the chief whip of Merkel’s Christian Democratic Union, said in an interview today in Berlin. France’s presidential vote and the Dutch government’s fall don’t change the fact “there’s no money in Europe, only deficits everywhere you look.”
Sales of new U.S. homes were stronger than projected in March, indicating cheaper borrowing costs are helping stabilize the real estate market. Purchases ran at a 328,000 annual rate, a decline of 7.1 percent from a revised 353,000 pace in February that was faster than first projected, figures from the Commerce Department showed today in Washington. Economists forecast a March rate of 319,000, according to the median estimate in a Bloomberg News survey.
Other data showed manufacturing in the region covered by the Federal Reserve Bank of Richmond grew more than forecast this month and U.S. consumer confidence was little changed.
Nordea Bank climbed 3.8 percent to 56.60 kronor after saying first-quarter profit rose 4.5 percent as loan losses receded and it made more money from its lending business. Net income grew to 773 million euros from 740 million euros a year earlier. That beat the 738 million-euro average estimate of 10 analysts surveyed by Bloomberg.
Kone rallied 8.2 percent to 44.59 euros, the biggest jump in three years. The company reported first-quarter net income of 108.6 million euros, compared with the 94.6 million-euro average estimate in a Bloomberg survey.
TeliaSonera, the biggest Swedish phone company, rose 6.6 percent to 44.15 kronor after saying it expects to receive about 22 billion kronor in dividends and proceeds from the sale of an indirect 8.2 percent stake in MegaFon to Alisher Usmanov’s AF Telecom.
Michelin rallied 6.1 percent to 53.75 euros. The world’s second-largest tiremaker said first-quarter revenue rose 5.1 percent to 5.3 billion euros on higher demand for specialty tires to equip earthmovers, aircraft and agricultural vehicles.
Grifols SA (GRF), Europe’s largest maker of blood-plasma products, rose 12 percent to 18.57 euros in Madrid, the highest price since September 2008. First-quarter net income of 67.5 million euros beat the 51.8 million-euro average analysts’ estimate compiled by Bloomberg.
Cove Energy Plc (COV) advanced 4.6 percent to 227 pence after agreeing to be bought by Royal Dutch Shell Plc as Europe’s largest oil company increased its bid to 1.12 billion pounds ($1.8 billion).
Capita Plc (CPI) dropped 6.4 percent to 682.5 pence after the company that provides a criminal-records service for the U.K. Home Office sold 40.4 million new shares for 685 pence apiece.
Umicore SA (UMI), the world’s largest precious-metals recycler, sank 4.8 percent to 39.78 euros in Brussels trading after forecasting profit this year below analyst expectations.
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