Bloomberg News

European Stocks Rebound From Three-Day Drop; Lundin Gains

April 08, 2013

European Stocks Rebound From Last Week’s Retreat

Banco Espirito Santo SA and Banco Comercial Portugues SA, Portugal’s largest publicly traded lenders, fell more than 4 percent after a court blocked part of the government’s deficit-reduction plan. Photographer: Mario Proenca/Bloomberg

European stocks climbed, rebounding from the biggest three-day selloff since July, as German industrial production increased more than forecast and investors awaited the start of U.S. earnings season.

Lundin Petroleum AB rallied the most in six weeks after discovering oil in the North Sea. Novartis AG and Roche Holding AG led health-care companies higher, rising more than 1.5 percent. Banco Espirito Santo SA, Portugal’s largest publicly traded lender, fell 3.4 percent after a court blocked part of the government’s deficit-reduction plan.

The Stoxx Europe 600 Index (SXXP) added 0.2 percent to 287.64 at the close of trading. The gauge slid 2.3 percent last week as U.S. jobs data signaled the recovery in the world’s largest economy has slowed. The measure has still advanced 2.9 percent this year as central banks maintained stimulus measures.

“I am still bullish,” said Kevin Lilley, a fund manager at Old Mutual Asset Managers U.K. in London, which oversees about 4 billion pounds ($6.2 billion). “With the economic data that has been weaker, I will need to moderate that view a little bit, but I still think it’s right to have a cyclically-biased portfolio.”

National benchmark indexes climbed in 13 of 18 markets in western Europe today. The U.K.’s FTSE 100 advanced 0.4 percent, while France’s CAC 40 (CAC) and Germany’s DAX added 0.1 percent. The volume of shares changing hands in Stoxx 600 companies today was 27 percent less than the average over the past 30 days, according to data compiled by Bloomberg.

Earnings Season

Alcoa Inc., the largest U.S. aluminum producer, unofficially kicks of the American earnings-reporting season after the close of New York markets today. Profits at companies in the Standard & Poor’s 500 Index are forecast to contract 1.8 percent in the first quarter, the first year-on-year decline since 2009, analysts’ estimates compiled by Bloomberg show.

Lundin rose 3.6 percent to 145.60 kronor, after saying the Luno II well, in which it owns a 40 percent stake, discovered oil-bearing sands with a 40 meter column of “good quality” crude. Pressure data showed a separate petroleum system to the nearby Edvard Grieg and Johan Sverdrup fields.

Premier Oil Plc (PMO), which has a 30 percent holding in Luno II, climbed 6.1 percent to 385 pence in London while Statoil ASA, which holds the remaining 30 percent, advanced 1.2 percent to 139.20 kroner in Oslo.

Cairn Energy Plc (CNE) gained 3.3 percent to 282 pence. Greenlight Capital Inc., the hedge fund founded by David Einhorn, raised its holdings in the oil explorer to 3 percent of voting rights, according to statement released on April 5.

Drugmakers Rise

A gauge of health-care shares had the biggest gain in the Stoxx 600, advancing 1 percent. Novartis, Europe’s biggest drugmaker, climbed 1.8 percent to 66.65 Swiss francs and Roche, the largest maker of cancer medicines, increased 1.8 percent to 224 francs.

United Internet AG rallied 4.3 percent to 19.36 euros after Morgan Stanley said the German broadband provider’s earnings will probably gain and its dividend may double by 2015.

Portugal’s PSI-20 Index (PSI20) fell 1.4 percent as Banco Espirito Santo slid 3.4 percent to 71 euro cents and Banco Comercial Portugues SA lost 3.5 percent to 8.2 cents.

The Portuguese government said it will impose more spending cuts to meet the terms of its 78 billion-euro ($101 billion) bailout after the Constitutional Court overruled a plan to suspend a monthly salary payment to state workers and pensioners. The ruling delays completion of the seventh review of the aid plan, and the corresponding disbursement of 2 billion euros won’t be paid until that review is concluded, Prime Minister Pedro Passos Coelho said.

Greek Banks

In Athens, National Bank of Greece SA (ETE) plummeted 10 percent to 46.6 euro cents while Eurobank Ergasias SA gained 20 percent to 18 cents. Regulators put the banks’ planned merger on hold while they raise funds separately to avoid nationalization.

Pirelli & C. SpA dropped 6.3 percent to 7.70 euros in Milan, the largest decline in almost 11 months. The tiremaker delayed a 2013-2017 business-plan presentation to November from May to help “provide better viability” on the economy. Pirelli said Europe’s debt crisis is having a “clear impact” on demand.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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