European stocks climbed, posting their biggest three-day rally this year, amid optimism central banks will add to stimulus measures and as a report showed that U.S. factory orders rebounded in May.
PSA Peugeot Citroen added 3.7 percent as a union official said the carmaker will eliminate more jobs this year than it had announced. Aberdeen Asset Management Plc (ADN) slid 3.7 percent as Credit Suisse Group AG (CSGN) was said to be selling a 7 percent stake in Scotland’s largest money manager. Barclays Plc (BARC) slid 0.8 percent after saying that its chief operating officer instructed the bank’s rate setters to lower their submissions for Libor.
The Stoxx Europe 600 Index climbed 1 percent to 257.39 at the close, completing a three-day gain of 5.2 percent, the gauge’s biggest since November. The benchmark measure has rallied 10 percent from this year’s low on June 4 as euro-area leaders opened the door to directly recapitalizing lenders using the European Stability Mechanism, the currency zone’s permanent bailout fund.
“It looks like we’re entering a quieter period,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank AG in Brugg, Switzerland. “The market shrugged off yesterday’s disappointing U.S. economic data. Providing we don’t encounter any serious negative news, the current mood may be able to support markets for a while.”
National benchmark indexes gained in every western-European (SXXP) market. France’s CAC 40 advanced 1 percent and the U.K.’s FTSE 100 increased 0.8 percent. Germany’s DAX rose 1.3 percent.
The European Central Bank and the Bank of England will announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. Five predicted a cut of 50 basis points and 11 foresaw no change.
The People’s Bank of China may cut lenders’ reserve requirements to increase liquidity in the banking system, according to a commentary on the front page of today’s China Securities Journal, which is published by the official Xinhua News Agency. The central bank announced a cut to interest rates on June 7, a day after the newspaper published a commentary urging the move.
In the U.S., a Commerce Department report showed that orders to factories in the world’s largest economy increased 0.7 percent in May. That exceeded the median forecast of 52 economists in a Bloomberg News survey for a 0.1 percent gain. The measure dropped for two consecutive months in March and April for the first time in more than three years.
U.K. exporters told the British Chambers of Commerce that their overseas sales improved in the second quarter, suggesting the economy performed better than forecast and avoided a further contraction in the second quarter.
The balance of manufacturers experiencing higher export deliveries rose to 31 percent, the most since 2010. The figure for services companies reached 24 percent, the highest since the third quarter of 2007.
Peugeot climbed 3.7 percent to 7.72 euros as Europe’s second-biggest carmaker plans to eliminate as much as 10 percent of its French workforce to reduce operational costs, a union official said. Peugeot may discuss its plans for the reorganization at its next works council meeting on July 12.
Delta Lloyd NV (DL) surged 4.5 percent to 11.57 euros, its highest price in seven weeks. The Dutch insurer spun off from Aviva Plc said the solvency of its IGD Group unit will increase at least 15 percentage points and that of its Delta Lloyd Levensverzekering NV business will rise at least 30 percentage points.
Vedanta Resources Plc (VED) soared 6.1 percent to 961 pence. Morgan Stanley resumed its overweight recommendation for the copper producer, the equivalent of a buy rating. The brokerage added that limited supply and resilient demand will support prices of copper, iron ore and gold.
Swiss Re Ltd. rose 1.7 percent to 61.10 Swiss francs after BlackRock Inc. said it will buy Private Equity Partners AG from the world’s second-biggest reinsurer and integrate the business with its own fund-of-funds division.
Argan (ARG) SA jumped 9.7 percent to 10.86 euros after the French warehouse owner said second-quarter rental income climbed 15 percent to 12.4 million euros ($15.6 million). The company increased its growth target for rental income in 2012 to 18 percent from 16 percent.
PostNL NV (PNL) gained 5.6 percent to 3.47 euros. The company will postpone the reorganization of its letter-delivery business, saying it will only close two offices this year.
Aberdeen Asset Management retreated 3.7 percent to 255 pence as two people with knowledge of the transaction said that Credit Suisse was selling the stake for as much as 205 million pounds ($322 million). Switzerland’s second-largest lender will sell as many as 80.4 million Aberdeen shares for a discount of as much as 7.4 percent to the closing price yesterday, said the people, who asked not to be identified because the process is private.
Barclays dropped 0.8 percent to 167.05 pence after earlier climbing as much as 4.8 percent and sliding as much as 4.4 percent. Bob Diamond stepped down today as chief executive officer and Jerry Del Missier quit as COO, the London-based lender said. Chairman Marcus Agius will also leave once he has found a replacement for Diamond.
Terna SpA and Snam SpA (SRG) dropped 1.5 percent to 2.80 euros and 2.4 percent to 3.45 euros, respectively. The Italian government is considering freezing the tariffs for electricity, gas, water and transport until 2013 to contain costs for citizens and businesses, daily la Repubblica reported.
The volume of shares changing hands in companies listed on the gauge was 7.6 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
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