Financial news, relevant trading information, and transparent commentary issues concerning all major markets.
Monday, 25 February 2013
Most European Stocks Rise on BOJ Speculation, Italy Vote
By Namitha Jagadeesh - Feb 25, 2013 2:09 PM GMT+0400
Most European stocks gained amid speculation Japan may appoint a central bank chief who favors stimulus and as investors awaited the result of Italy’s elections. Asian shares and U.S. index futures rose.
BP Plc advanced 1.5 percent after a report the U.S. may consider an offer to settle oil-spill claims. PostNL NV (PNL) climbed the most in a month as earnings beat estimates. Reckitt Benckiser Group Plc slid the most in nine months after a U.S. regulator gave two manufacturers approval to produce generic versions of its Suboxone heroin-dependency treatment.
A financial trader uses a telephone as he monitors data on his computer screens in front of a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
The Stoxx Europe 600 Index (SXXP) increased 0.2 percent to 288.99 at 10:09 a.m. in London, as two shares advanced for each one that fell. The equity benchmark is on course for a ninth month of gains, the longest winning streak since 1997, as U.S. lawmakers agreed on a compromise budget and European Central Bank President Mario Draghi pledged to defend the euro.
“Having a pro-stimulus Bank of Japan governor can be good on a short-term basis because we all know Japan needs negative real interest rates,” said Pierre Mouton, who helps oversee $6 billion as portfolio manager at Notz, Stucki & Cie. in Geneva. “The very good U.S. markets also help explain why European stocks are up today. With the Italian elections, investors are certainly hoping for the status quo.”
The MSCI Asia Pacific Index rose 0.5 percent today, while futures on the Standard & Poor’s 500 Index (SPX) added 0.2 percent. The S&P 500 rallied 0.5 percent on Feb. 22 as company earnings beat analysts’ estimates.
The volume of shares changing hands in Stoxx 600 companies was 28 percent less than the 30-day average, data compiled by Bloomberg show.
In Japan, Prime Minister Shinzo Abe will probably nominate Asian Development Bank President Haruhiko Kuroda as Bank of Japan governor, two government officials with knowledge of the discussions said. Kuroda said earlier this month additional monetary easing can be justified for 2013.
Kuroda “has a lot of experience in international finance at the ADB and elsewhere,” Finance Minister Taro Aso told reporters in Seoul today.
Pollsters will release initial estimates of the Italian election results after 3 p.m. in Rome today. Incumbent Mario Monti and front-runner Pier Luigi Bersani of the Democratic Party have vowed to maintain budget rigor, while Silvio Berlusconi and Beppe Grillo have promised to stop tax increases.
The U.K. lost its top credit rating from Moody’s Investors Service, which cited weakness in the country’s growth outlook and challenges to the government’s fiscal consolidation program. Moody’s said late Feb. 22 that it lowered the rating one level to Aa1 from Aaa and changed the outlook on the nation’s debt to stable from negative.
In China, the preliminary reading of a Purchasing Managers’ Index was 50.4 in February, according to HSBC Holdings Plc and Markit Economics. That compared with the 52.3 final reading for January and the 52.2 median estimate of 11 analysts surveyed by Bloomberg. A number above 50 indicates growth.
Euro-region stocks are missing this year’s global rally as the correlation between the Euro Stoxx 50 Index and the MSCI All-Country World Index of 45 developed and emerging markets has fallen to 77 percent. That’s the lowest level since the collapse of Lehman Brothers Holdings Inc. in 2008, according to data compiled by Bloomberg.
BP gained 6.45 pence to 450.5 pence as a U.S. trial over the 2010 Gulf of Mexico oil spill begins today. The U.S. and Gulf states are considering a $16 billion accord with BP over pollution fines and natural-resource damages claims, the Wall Street Journal reported on Feb. 22, citing unidentified people familiar with the matter.
Scott Dean, a spokesman for BP, declined to comment, as did Joy Patterson, a spokeswoman for Alabama Attorney General Luther Strange, and Amanda Larkins, spokeswoman for Louisiana Attorney General Buddy Caldwell.
PostNL advanced 6.2 percent to 1.96 euros, the biggest gain since Jan. 21, after reporting fourth-quarter earnings before interest and taxes of 219 million euros ($290 million). That beat the 144 million-euro average analyst forecast in a Bloomberg survey.
TNT Express NV rose 2.5 percent to 5.70 euros after saying it plans to name Tex Gunning as chief executive officer as of June 1, pending shareholder approval. Gunning is currently head of the decorative paints unit of Akzo Nobel NV.
Elan Corp. surged 8.5 percent to 8.65 euros, a three-month high. RP Management LLC, an investor in royalty streams from pharmaceuticals, said it’s willing to buy the Irish drugmaker for about $6.5 billion.
Reckitt Benckiser slid 4 percent to 4,334 pence, the biggest drop since May, after saying two unnamed manufacturers received approval from the U.S. Food and Drug Administration to produce generic Suboxone tablets in the world’s largest economy.
The drug faces generic competition after losing U.S. patent protection in 2009, which Reckitt Benckiser has said would eliminate as much as 90 percent of tablet revenue and about 20 percent of the film-strip version.
Pearson Plc (PSON) retreated 3.1 percent to 1,178 pence after saying it expects tough market conditions to continue this year. The publisher of the Financial Times newspaper forecast 2013 operating profit will be in line with 2012, when earnings fell.