European shares rose for a third day, completing their biggest weekly jump since April, as insurers and banks rallied.
ING Groep NV gained 1.9 percent and Banca Monte dei Paschi di Siena SpA climbed 5 percent as gauges of banks and insurers advanced more than 0.8 percent. Carnival Corp. rose 3.3 percent after Credit Suisse Group AG and Natixis SA raised their ratings on the stock. BAE Systems Plc lost 4.5 percent after it said the United Arab Emirates stopped talks to buy its combat planes.
The Stoxx Europe 600 Index advanced 0.5 percent to 321.14 at 5 p.m. in London, bringing its increase for the week to 3.7 percent, after the Federal Reserve said it would start paring its record stimulus. European shares extended their rally today after a report showed the U.S. economy expanded in the third quarter at a faster rate than previously forecast.
“The positive move here is still a reaction on the Fed getting the tapering is not tightening message right,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said in a phone interview. “This is still giving some relief to European stocks.”
The Stoxx 600 climbed 1.7 percent yesterday after the Federal Open Market Committee said Dec. 18 that it will lower monthly asset purchases to $75 billion from $85 billion. The central bank also said it will probably hold key interest rates within the current range of zero to 0.25 percent “well past the time that the unemployment rate declines below 6.5 percent,” according to its statement.
U.S. gross domestic product climbed at a 4.1 percent annualized rate in the quarter ended September, Commerce Department figures showed. That’s the strongest pace since the final three months of 2011 and up from a previous estimate of 3.6 percent. The median forecast of 72 economists surveyed by Bloomberg projected a 3.6 percent pace after 2.5 percent in the second quarter.
Data from Nuremberg-based GfK SE showed a gauge of German consumer confidence will climb to 7.6 in January from 7.4 this month, the highest reading since August 2007. A U.K. consumer sentiment index by GfK NOP Ltd. dropped 1 point in December from November to minus 13, the London-based research group said. The median forecast of 24 economists in a Bloomberg News survey called for a 1-point increase to minus 11.
Options and futures on stocks and indexes expire today in a process known as quadruple witching. Trading tends to turn more volatile close to the expirations.
“With today’s quadruple witch, the last high volume day in 2013, liquidity will dry out into next week, so it is the perfect environment for window dressing and for squeezing markets higher,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, wrote in an e-mail.
The volume of shares changing hands in companies listed on the Stoxx 600 was 69 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.
National benchmark indexes rose in 16 of the 18 western-European markets. The U.K.’s FTSE 100 Index increased 0.3 percent, France’s CAC 40 added 0.4 percent and Germany’s DAX jumped 0.7 percent.
A gauge of insurers in the Stoxx 600 rallied 1 percent, while banks added 0.9 percent for some of the biggest gains among 19 industry groups. ING climbed 1.9 percent to 9.75 euros. Italy’s Monte dei Paschi rallied 5 percent to 17 euro cents and Banca Popolare di Milano Scarl jumped 2 percent to 46 euro cents.
Carnival advanced 3.3 percent to 2,389 pence. Credit Suisse raised its rating to outperform from neutral and Natixis increased it to neutral from reduce. The world’s largest cruise operator posted fourth-quarter profit that beat analysts’ estimates yesterday.
German healthcare provider Rhoen Klinikum AG jumped 5 percent to 21.39 euros, its highest price since June 2012. Shareholder B Braun Melsungen AG withdrew its lawsuit against Rhoen-Klinikum’s sale of 43 clinics and other assets to Fresenius SE’s Helios unit, according to a statement.
Telenet Group Holding NV rose 2.9 percent to 42.12 euros after Goldman Sachs Group Inc. upgraded the stock to buy from neutral, citing growth prospects.
BAE retreated 4.5 percent to 422.1 pence. Europe’s largest defense company said yesterday that the United Arab Emirates stopped talks to buy its Eurofighter Typhoon, just weeks after Prime Minister David Cameron lobbied for them in Dubai. Negotiations with Saudi Arabia over pricing are also dragging out, delaying BAE’s efforts to beef up its export business.
Lundin Petroleum AB lost 7.8 percent to 121.20 kronor, its lowest price since October 2011, after Norway said the Swedish oil explorer drilled a dry well.
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