European stocks rose to their highest level in 3 1/2 months as Chinese economic data beat estimates and the U.S. offered to defer an attack on Syria if it complied with a Russian proposal to give up chemical weapons.
PSA Peugeot (UG) Citroen climbed to a 17-month high after saying it won’t cut prices for the Peugeot brand. Glencore Xstrata Plc advanced 2.3 percent after raising its estimate for financial gains from its merger with Xstrata Plc. Neste Oil Oyj surged to a five-year high after upgrading its full-year forecast. GlaxoSmithKline Plc slid 2.5 percent as new U.S. guidelines opened the door for generic versions of its Advair drug.
The Stoxx Europe 600 Index rallied 1.3 percent to 309.8 at the close of trading in London, its highest level since May 22. The gauge has surged 11 percent this year as central banks around the world maintained stimulus measures and the global economy showed signs of recovery.
“There is a change in sentiment and we think markets can go further until the end of the year,” Herbert Perus, who helps oversee about $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said by telephone. “Syria is not as big a problem anymore. The possibility of a military strike seems low now.”
The volume of shares changing hands in companies listed on the Stoxx 600 was 33 percent higher than the 30-day average, data compiled by Bloomberg showed.
China’s industrial output rose 10.4 percent in August from a year earlier and retail sales gained 13.4 percent, the National Bureau of Statistics said today. The advance in industrial production compared with a median estimate for 9.9 percent growth in a Bloomberg News survey and a 9.7 percent increase in July. The retail-sales figure compared with a projection for 13.3 percent advance and a 13.2 percent gain the previous month.
“International investors are getting more and more aware of the fact that European markets are not as bad as they looked in the past,” Perus said. “The fear over China was overstated. These are normalized figures and this is good for the markets because that fear is getting priced out.”
National benchmarks rose in 17 of the 18 western European markets today. France’s CAC 40 gained 1.9 percent. Germany’s DAX (DAX) rallied 2.1 percent. The U.K.’s FTSE 100 added 0.8 percent.
U.S. President Barack Obama said on ABC News that an assault on Syria will “absolutely” be put on hold if it agrees to surrender chemical weapons. Interfax reported that Bashar al-Assad’s government accepted a Russian-backed plan to establish international control over such arms following an attack last month that killed hundreds of people in the suburbs of Damascus.
Obama will address Americans on television at 9 p.m. Washington time.
Peugeot gained 1.8 percent to 12.33 euros, its highest since March 2012. Maxime Picat, managing director of the Peugeot brand, said at the Frankfurt auto show the carmaker will not cut prices even as it faces price pressure in Europe. Separately, a report from the China Association of Automobile Manufacturers showed auto sales to dealerships in the world’s second-biggest economy rose 11 percent last month from a year ago.
A gauge of automobile and car-part companies posted the biggest gain among the 19 industry groups in the Stoxx 600, increasing 2.5 percent. Volkswagen AG preferred shares climbed 4.1 percent to 178.05 euros.
Glencore Xstrata (GLEN) advanced 2.3 percent to 328.75 pence, its highest price since May 30. The world’s biggest exporter of power-station coal said in a statement that “synergies” from its merger with Xstrata will be at least $2 billion, exceeding the initial guidance of $500 million. The Baar, Switzerland-based company released the statement before its investor meeting in London today.
Neste Oil surged 13 percent to 17.33 euros. Finland’s only refiner said comparable operating profit will increase to more than 530 million euros ($702 million) in 2013. Earlier, the company had merely said profit will be an improvement over last year’s 355 million euros.
Ashmore Group Plc (ASHM) jumped 5.3 percent to 382.2 pence. The U.K. fund manager that invests in emerging markets reported full-year pretax profit and revenue that exceeded estimates. The London-based company also raised its dividend.
Glaxo fell 2.5 percent to 1,598.5 pence. Draft guidelines published by the U.S. Food and Drug Administration yesterday call for “relatively basic preclinical tests and a very short clinical trial,” for generic replacements to drugs such as Advair, Bloomberg Industries analyst Sam Fazeli wrote in a note today. “Advair sales will probably suffer an accelerated fall in 2016.”
Eiffage SA lost 5.7 percent to 41.20 euros. Groupama SA sold shares of the company that manages toll roads and other infrastructure at 41.75 euros apiece, according to a person with direct knowledge of the transaction.
Partners Group Holding AG tumbled 8.7 percent to 226.40 Swiss francs for the biggest drop since October 2008. The Swiss money manager focused on private equity reported performance fees slid 35 percent to 13 million Swiss francs ($13.9 million), depressing the firm’s margin on revenue to 127 basis points, from 137 basis points a year earlier.
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