European (SXXP) stocks rose, extending yesterday’s biggest rally in a month, as investors awaited a U.S. report on payrolls and unemployment. U.S. index futures and Asian shares climbed.
Banks contributed the most to the benchmark Stoxx Europe 600 Index’s advance as Banco Santander SA (SAN) and BNP Paribas SA (BNP) each climbed more than 2 percent. Xstrata (XTA) Plc jumped 5.2 percent after Glencore International Plc (GLEN) increased its offer for the mining company led by Mick Davis. Solvay SA climbed 3.9 percent after NYSE Euronext said it will join France’s CAC 40 (CAC) Index.
The Stoxx Europe 600 Index advanced 0.5 percent to 272.91 at 11:29 a.m. in London, heading for its highest close since July 2011. The gauge has gained 2.5 percent this week as European Central Bank Mario Draghi said yesterday policy makers agreed on a plan to buy unlimited government debt. Futures on the Standard & Poor’s 500 Index added 0.4 percent today, while the MSCI Asia Pacific Index jumped 2.2 percent.
“The encouraging economic data -- the ADP and ISM services numbers -- point to the prospects of better employment figures today,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London, referring to releases from the ADP Employer Services and the Institute for Supply Management yesterday that beat economists’ forecasts. “The risk of instability in the euro zone has diminished considerably because of the ECB’s initiative, and the banks have responded very well.”
A U.S. Labor Department report today will probably show that payrolls in the world’s biggest economy rose at a slower pace last month, economists said. Employers hired an additional 130,000 workers in August, according to the median forecast of economists surveyed by Bloomberg. They took on 163,000 in July.
The release may show that the unemployment rate held at 8.3 percent in August, economists projected. Unemployment has stayed above 8 percent for the last 42 months.
The ECB’s bond-buying plan will target government notes with maturities of one to three years, Draghi said. Purchases will be fully sterilized to ensure a neutral impact on money supply, and the ECB will not have seniority, he said.
The volume of shares changing hands on the Stoxx 600 was more than double the average of the last 30 days, data compiled by Bloomberg show.
China has approved plans to build 2,018 kilometers of roads, according to statements on the National Development and Reform Commission’s website. The state endorsed the projects in the June-August period. A Sept. 5 statement showed the government also gave the go ahead to plans to build subways in 18 Chinese cities, as it seeks to revive economic growth.
A gauge of banking shares rallied 2.3 percent to its highest level since April 3.
Santander, Spain’s biggest lender, climbed 2.1 percent to 6.11 euros and BNP Paribas, France’s largest bank, added 4.2 percent to 38.70 euros. Deutsche Bank AG (DBK) and Barclays Plc (BARC) surged 5.8 percent to 31.51 euros and 5.5 percent to 203.6 pence, respectively.
Xstrata jumped 5.2 percent to 1,030 pence, while Glencore slumped 5.5 percent to 370.7 pence. The commodities trader, which owns 34 percent of Xstrata, offered 3.05 of its shares for every one that its target’s investors hold, according to a statement from Zug, Switzerland-based Xstrata. Glencore’s Chief Executive Officer, Ivan Glasenberg, will become CEO of the combined group. Under the previous offer, Xstrata’s Davis would have taken over the position.
Rio Tinto Group climbed 4.3 percent to 2,968.5 pence for the biggest contribution to the Stoxx 600’s advance.
Meggitt Plc (MGGT) added 1.5 percent to 406.9 pence after Citigroup Inc. raised its recommendation on the shares to buy from neutral. The brokerage said that other companies may find Meggitt an attractive takeover target.
Solvay SA (SOLB) gained 3.9 percent to 92.33 euros after NYSE Euronext said late yesterday that the company will replace PSA Peugeot Citroen in the CAC 40 from Sept. 24.
Neopost SA (NEO) slumped 6.8 percent to 39.47 euros, its biggest drop since March 2011. The company yesterday posted second- quarter sales of 260.7 million euros ($331 million), a 2.2 percent decline from a year earlier based on constant exchange rates.
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