Bloomberg News

European Stocks Rise on U.S. Data; Morrison, Celesio Gain

March 26, 2013

European Stocks Climb Before U.S. Durable Goods, Home Sales Data

Financial traders monitor data on computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg

European (SXXP) stocks advanced as better- than-estimated U.S. durable-goods orders and housing data helped offset concern euro-area lawmakers will impose losses on bank deposits in the region.

William Morrison Supermarkets Plc and Celesio AG (CLS1) led a gauge of retailers higher, each climbing more than 3 percent. Kazakhmys Plc slumped to an almost four-year low as the copper producer cut its dividend. Telefonica SA (TEF) dropped the most in more than seven months after selling treasury stock.

The Stoxx Europe 600 Index added 0.2 percent to 293.76 at the close in London. The benchmark gauge is heading for a 10th month of gains, its longest winning streak since July 1997, after U.S. data beat forecasts and amid optimism central banks will continue monetary stimulus.

“The U.S. economy is definitely gaining momentum.” said Michael Morris, who oversees about $1 billion as head of European equities at Mitsubishi UFJ Asset Management in London. “We’re getting into the next phase of the investment cycle. The U.S. housing market bottomed a long time ago, and I don’t expect it to deteriorate again. We are generally getting data which is consistent with an economic recovery.”

National benchmark indexes advanced in seven of the 18 western European markets today. The U.K.’s FTSE 100 Index added 0.3 percent, France’s CAC 40 Index climbed 0.6 percent, while Germany’s DAX increased 0.1 percent.

The Cyprus Stock Exchange remains closed for trading today and tomorrow as banks are closed, according to a statement on CSE’s website.

U.S. Economy

U.S. durable-goods orders rose in February by the most in five months, Commerce Department figures showed today. The 5.7 percent increase in bookings for goods meant to last at least three years followed a revised 3.8 percent drop in January. Economists had predicted 3.9 percent increase before the report.

A separate report showed the S&P/Case-Shiller index of property values in 20 cities rose 8.1 percent in the 12 months ended January, the biggest year-over-year gain since June 2006, The median estimate in a Bloomberg survey had called for a gain of 7.9 percent.

Stocks earlier pared gains after Reuters reported that the European Parliament will demand that depositors with more than 100,000 euros ($129,000) take losses. The news agency cited Gunnar Hokmark, a lawmaker.

Retailers Rally

Morrison advanced 3.5 percent to 276 pence after Citigroup Inc. upgraded the retailer to buy and lifted its price estimate for the shares to 325 pence from 280 pence.

Celesio added 4 percent to 14.50 euros after the Germany drug wholesaler said 2012 earnings exceeded its own target.

Bellway Plc rose 2.9 percent to 1,227 pence. The U.K. housebuilder said net income increased 51 percent in the six months ended Jan. 31 to 46 million pounds ($70 million) from a year earlier.

SBM Offshore NV rallied 3.6 percent to 13.34 euros. Brazil’s Petroleo Brasileiro SA awarded letters of intent for the lease of two floating production, storage and offloading units to the Dutch company. The projects will have a total value of $3.5 billion and will be operated by SBM’s joint venture with Queiroz Galvao Oleo e Gas SA and other partners.

EDF SA (EDF) advanced 2.4 percent to 15.31 euros after Morgan Stanley upgraded the shares to overweight, the equivalent of a buy recommendation, from equal weight. The brokerage said the shares are trading at a deep discount.

Kazakhmys declined 8.6 percent to 405.3 pence, the lowest price since April 1, 2009 after Kazakhstan’s biggest copper producer cut its 2012 dividend to 11 cents a share, down from 28 cents in 2011. The company posted a full-year loss after the value of its 26 percent stake in Eurasian Natural Resources Corp. dropped by more than half.

Telefonica dropped 5 percent to 10.68 euros as trading in the shares opened late after being suspended for more than an hour. The company raised 975 million euros in a sale of treasury stock at 10.80 euros per share.

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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