Bloomberg News

European Stocks Rise to 23-Month High as Vodafone Climbs

January 24, 2013

European stocks climbed to their highest level since February 2011 as jobless claims in the U.S. fell to a five-year low and the House of Representatives voted to temporarily suspend the federal government’s borrowing limit.

EasyJet Plc rallied 5.1 percent to a record price after saying fiscal first-quarter sales gained. Vodafone Group Plc (VOD) added 3.2 percent as Greenlight Capital Re Ltd. said it has increased its stake in the company. Banca Monte dei Paschi di Siena SpA plunged 8.2 percent after the Bank of Italy said that the world’s oldest lender hid documents from its regulators.

The Stoxx Europe 600 Index (SXXP) gained 0.2 percent to 288.89 at the close of trading, after earlier sliding as much as 0.4 percent. The equity benchmark has climbed 3.3 percent this year after U.S. lawmakers agreed on a compromise budget.

“Today the U.S. markets gave the fuel for the ongoing up move in Europe,” Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin, wrote in an e-mail. “Better- than-estimated jobless claims numbers terminated the worries about Apple figures last night. It’s hard right now not to be in the market, so most investors try to pick every single pullback in the stock markets.”

A Labor Department report today showed claims for jobless benefits in the U.S. unexpectedly dropped last week. Applications for unemployment insurance payments decreased by 5,000 to 330,000 in the week ended Jan. 19, the fewest since the same week in 2008. Economists had forecast 355,000 claims, according to the median estimate in a Bloomberg survey.

Debt Ceiling

The U.S. House of Representatives approved legislation to suspend the borrowing limit late yesterday. The measure, which passed 285-144, lifts the government’s $16.4 trillion borrowing limit until May 19.

In China, manufacturing expanded at the fastest rate in two years, according to a survey of companies by Markit and HSBC Holdings Plc. The preliminary reading of their purchasing managers’ index rose to 51.9 in January, from 51.5 in December. That compares with the median estimate of 51.7 in a Bloomberg survey. HSBC and Markit will report their final reading for January on Feb. 1.

National benchmark indexes advanced in 14 of the 18 western-European markets. The U.K.’s FTSE 100 gained 1.1 percent, while France’s CAC 40 added 0.7 percent. Germany’s DAX rose 0.5 percent.

The volume of shares changing hands in Stoxx 600 companies today was 25 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

Apple Earnings

Apple, the world’s most valuable company, reported profit that rose less than 1 percent to $13.1 billion, or $13.81 a share, in the period that ended Dec. 29. Analysts had predicted (AAPL:US) profit of $13.53 a share. Sales increased 18 percent to $54.5 billion, falling short of $54.9 billion, the average analyst estimate compiled by Bloomberg.

EasyJet rallied 5.1 percent to 898.5 pence, the highest price since its initial public offering in November 2000. Revenue (EZJ) jumped 9.2 percent to 833 million pounds ($1.3 billion) in the three months ended Dec. 31, compared with 763 million pounds a year earlier, the Luton, England-based company said. The airline forecast that it will post a pretax loss of 50 million pounds to 75 million pounds in the first half of 2013.

Ryanair Holdings Plc (RYA), Europe’s biggest discount airline, rose 2.7 percent to 5.40 euros in Dublin, its highest price in more than five years.

Vodafone Jumps

Vodafone jumped 3.2 percent to 168.7 pence, its biggest gain in five months. Greenlight Capital Re Ltd. wrote in a note that the mobile-phone operator’s valuation implies that its 45 percent stake in Verizon Wireless has no value. The note described the holding as “clearly quite valuable.” Verizon’s market value climbed above Vodafone’s in December for the first time in a decade, according to data compiled by Bloomberg.

Croda International Plc (CRDA) climbed 3.4 percent to 2,437 pence, its biggest advance in three months. JPMorgan Chase & Co. reiterated its overweight rating on the stock, the equivalent of a buy recommendation, saying that the chemical maker will probably please investors when it reports full-year 2012 earnings on Feb. 26.

Polyus Gold International Ltd. (PGIL) surged 9.7 percent to 218.5 pence as billionaire Mikhail Prokhorov’s Onexim Holdings Ltd. agreed to sell his stake in the company to a group of investors, according to three people with knowledge of the plan.

Monte Paschi

Monte Paschi slumped 8.2 percent to 23.3 euro cents. Italy’s central bank said it will review documents covering financial transactions that Monte Paschi hid from its regulators. The bank’s actions may force it to restate profit.

Logitech (LOGN) International SA plunged 9.6 percent to 6.51 Swiss francs. The world’s biggest maker of computer mice put its remote-control and video-security businesses up for sale after posting the loss. The average estimate of seven analysts had called for net income of $50.3 million, according to a Bloomberg survey. Logitech reported third-quarter profit of $55 million in its previous fiscal year.

ICAP Plc slid 1 percent to 324 pence after the world’s largest broker of transactions between banks said that the Financial Services Authority has started to investigate one of its units as part of a probe into rigging Libor.

Opap SA tumbled 11 percent to 6.26 euros, its biggest drop in four months, after the European Court of Justice ruled that the company’s monopoly over gambling in Greece was illegal. Opap’s competitors Stanleybet International Ltd., William Hill Plc and Sportingbet Plc brought the case.

Bwin.Party Digital Entertainment Plc and Ladbrokes Plc led gambling companies higher, rising 12 percent to 113.8 pence and 3.4 percent to 206.1 pence, respectively.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

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


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