Thursday, 25 April 2013

European Stocks Rise as U.K. Avoids Triple-Dip Recession

By Namitha Jagadeesh - Apr 25, 2013 2:56 PM GMT+0400

European (SXXP) stocks advanced for a fifth day, their longest rally this year, as data showed the U.K. avoided a triple-dip recession and as companies from British American Tobacco Plc (BATS) to Volvo AB (VOLVB) reported results. U.S. index futures and Asian shares rose.
BAT gained 2.2 percent after first-quarter sales surpassed projections. Volvo climbed 1.9 percent as truck orders increased. Vodafone Group Plc increased 2.4 percent after a report Verizon Communications Inc. may bid $100 billion for full control of Verizon Wireless. Unilever fell 2.1 percent after posting sales growth that missed projections.
European Stocks Are Little Changed as Companies Report Earnings
Volvo advanced 2 percent as truck orders increased. Photographer: Bartek Sadowski/Bloomberg
The Stoxx Europe 600 Index added 0.3 percent to 295.39 at 11:54 a.m. in London. The measure has rallied 3.6 percent so far this week as company earnings beat forecasts and investors speculated the European Central Bank will cutinterest rates. Contracts on the Standard & Poor’s 500 Index advanced 0.3 percent, while the MSCI Asia Pacific Index gained 0.9 percent.
“The U.K. GDP numbers were somewhat better than feared and at least contributed to alleviate concern about a new recession in the U.K.,” said Espen Furnes, a fund manager who helps oversee $75 billion at Storebrand Asset Management in Oslo. “The European earnings season so far has been a mixed bag. The comments on outlook have been muted but not outright negative. The markets see this as a temporary pause and expect an upswing in earnings in the second half.”

U.K. Economy

Britain avoided a triple-dip recession as the economy expanded more than forecast. Gross domestic product rose 0.3 percent in the first quarter after contracting 0.3 percent in the previous quarter, the Office for National Statistics said. The median estimate of economists in a Bloomberg survey had called for a 0.1 percent gain.
BAT climbed 2.2 percent to 3,624.5 pence. Europe’s largest cigarette maker said first-quarter sales excluding currency swings rose 5 percent. That beat the 3.7 percent average estimate of analysts surveyed by Bloomberg.
Volvo advanced 1.9 percent to 92 kronor after saying truck orders gained 11 percent to 61,045 in the first quarter. The world’s second-largest truckmaker reported first-quarter operating profit of 482 million kronor ($73 million), missing the analysts’ average estimate of 1.63 billion kronor.

Verizon Bid

Vodafone added 2.4 percent to 197.85 pence, its highest price since April 2, after Reuters reported that Verizon has hired advisers to prepare a possible $100 billion cash-and-stock offer to buy out Vodafone’s stake in Verizon Wireless. Brenda Raney, a spokeswoman for Verizon Wireless, declined to comment to Bloomberg News.
Nobel Biocare Holding AG jumped 6.8 percent to 10.15 Swiss francs, its largest increase in three months. The world’s second-biggest maker of dental implants posted first-quarter net income of 13.3 million euros, exceeding the 11.7 million euros projected by analysts in a Bloomberg survey.
Straumann Holding AG, the largest dental-implants maker, advanced 4.6 percent to 124.20 francs.
Bankia SA (BKIA) rose 4 percent to 13.10 euros. The Spanish lender that posted a record 19 billion-euro ($25 billion) loss in 2012 swung to profit in the first quarter. Net income was 74 million euros in the first three months of the year, the bank said late yesterday. That surpassed the 46.3 million-euro average analyst projection.

Unilever Sales

Unilever fell 2.1 percent to 2,786 pence in London after the world’s second-biggest consumer-goods company reported the slowest quarterly revenue growth in two years. So-called underlying sales, which exclude acquisitions, disposals and currency swings, rose 4.9 percent in the first quarter from a year earlier. The median analyst estimate had projected a gain of 5.5 percent.
Bayer AG (BAYN) dropped 0.8 percent to 80.01 euros. Germany’s biggest drugmaker posted first-quarter earnings before interest, taxes, depreciation and amortization and special items of 2.45 billion euros, trailing the 2.55 billion-euro estimate of analysts in a Bloomberg survey.
Banco Santander SA retreated 3.6 percent to 5.42 euros after Spain’s biggest lender reported first-quarter net income of 1.21 billion euros, missing the 1.31 billion-euro average estimate of analysts.
Royal KPN NV slid 5.2 percent to 2.63 euros. The Dutch phone operator said it will sell 2.84 billion new shares for 1.06 euros each, a 62 percent discount on yesterday’s closing price of 2.78 euros.
AstraZeneca Plc lost 2.6 percent to 3,301 pence as the U.K.’s second-biggest pharmaceutical company said revenue fell 13 percent to $6.39 billion in the three months ended March. That missed the $6.55 billion projected by analysts in a Bloomberg survey.
The volume of shares changing hands in companies on the Stoxx 600 was 17 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
To contact the reporter on this story: Namitha Jagadeesh in London at
To contact the editor responsible for this story: Andrew Rummer at