Bloomberg News

European Stocks Close Little Changed at 19-Month High

December 20, 2012

European stocks closed little changed at a 19-month high as investors awaited developments in U.S. negotiations to avoid the so-called fiscal cliff of automatic tax increases and spending cuts.

SBM Offshore NV (SBMO) soared the most in at least 23 years after seeking to settle a dispute with Talisman Energy Inc. Ericsson AB lost 1.8 percent after taking an 8 billion-krona ($1.2 billion) charge related to its wireless-chip venture with STMicroelectronics NV. (STM) UBS AG, Switzerland’s biggest bank, dropped 1.1 percent as it faces scrutiny in Hong Kong for possible misconduct linked to the city’s interbank rates.

The Stoxx Europe 600 Index (SXXP) increased less than 0.1 percent to 281.81 at the close of trading, the highest level since May 2011. The benchmark measure is heading for a seventh straight month of gains and has rallied 15 percent this year as the European Central Bank announced an unlimited bond-buying program and the Federal Reserve began a third round of asset purchases.

“Investors won’t be taking any big positions from now until year end,” said Matthieu Giuliani, a fund manager at Banque Palatine SA in Paris, which oversees $5.3 billion. “As for the fiscal cliff, it’s in the best interest of both parties to find a solution. It’s normal that the opposition asserts its power to prolong things, but in the end they will reach an agreement.”

National benchmark indexes rose in 11 of the 18 western European markets. France’s CAC 40 and Germany’s DAX added less than 0.1 percent, while the U.K.’s FTSE 100 (UKX) declined less than 0.1 percent.

Volume Increase

The volume of shares changing hands in Stoxx 600 companies was 14 percent greater than the 30-day average, according to data compiled by Bloomberg.

Officials from President Barack Obama’s administration told leaders of U.S. business and financial-services groups that negotiations with House Speaker John Boehner, a Republican, have deteriorated in the last 24 hours, according to a person familiar with the meeting.

The officials told the group of eight industry representatives at the White House that Republican plans to move forward with Boehner’s alternative proposal on taxes and spending risks pushing the government past the deadline, said the person, who asked for anonymity to discuss the private talks. If lawmakers don’t reach an agreement by the end of the year, a package of more than $600 billion of automatic tax increases and spending cuts, will come into force in January.

U.S. Economy

The U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, reflecting the first gain in state and local government spending in three years, more consumer purchases and a smaller trade gap, according to a report today.

Data also showed manufacturing in the Philadelphia region unexpectedly expanded in December, while sales of previously owned U.S. houses rose more than forecast in November.

SBM Offshore climbed 19 percent to 10.97 euros, the biggest jump since at least October 1989, as the world’s largest maker of floating oil and gas output platforms sought to settle a dispute with Talisman and wrote off the value of a related operation. The company will sell a 9.95 percent stake to HAL Investments BV for $193 million to restore its balance sheet and meet banking covenants.

Ericsson fell 1.8 percent to 65.15 kronor as the world’s largest maker of mobile-phone networks took the charge for writing down the value of ST-Ericsson. The company said it won’t buy a full majority of the unit after Geneva-based STMicroelectronics said it will exit the venture.

UBS Probe

UBS (UBSN) slipped 1.1 percent to 15.03 Swiss francs. The Hong Kong Monetary Authority has started an investigation to see if there was wrongdoing by the bank in its submission of data for setting the Hong Kong Interbank Offered Rate, according to a statement from the de-facto central bank.

Cap Gemini SA (CAP), a French computer-services company, slid 2.7 percent to 33.56 euros. Accenture Plc, the world’s second- largest technology-consulting company, reported a decline in first-quarter revenue from its consulting business.

Areva SA (AREVA) lost 3 percent to 13.02 euros. The maker of nuclear reactors, offshore wind turbines and biomass plants cut its earnings forecast for 2013, citing financing delays at unspecified renewable energy projects carried out by clients.

Immofinanz AG (IIA) slid 4.5 percent to 3.26 euros. The Austrian real-estate company said first-half net income declined to 103.3 million euros from 265.1 million euros a year ago.

Carnival Corp. (CCL:US), the world’s largest cruise-line operator, tumbled 6.1 percent to 2,391 pence for the worst performance on the Stoxx 600. The company said it sees 2013 adjusted earnings per share in the range of $2.20 to $2.40, lower than the estimate of $2.46.

Weir Group Plc (WEIR) added 2.8 percent to 1,863 pence as the largest provider of pumps to mining companies agreed to buy Mathena Inc. for as much as $385 million.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

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


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  • CCL
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