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Monday, 29 July 2013
Europe Stocks Rise for First Day in Three as Danone Gains
By Corinne Gretler - Jul 29, 2013 1:18 PM GMT+0400
European stocks gained for the first time in three days as companies from Danone to TNT (TNTE) Express NV reported results. U.S. index futures and Asian shares retreated.
Danone climbed 3.1 percent as sales growth beat estimates. Elan Corp. jumped 11 percent after agreeing to be bought for $8.6 billion. TNT slumped the most in four months as the Dutch package-delivery company posted a loss. Barclays Plc (BARC) fell 3.2 percent as Britain’s second-largest bank by assets considers selling shares or contingent convertible bonds.
The Stoxx Europe 600 Index added 0.4 percent to 300.01 at 10:17 a.m. in London, having earlier advanced as much as 0.7 percent. The gauge declined 0.3 percent last week as earnings from BASF SE and ABB Ltd. missed estimates while a survey of purchasing managers showed euro-area manufacturing unexpectedly expanded in July for the first time in two years.
“European equity markets are still holding up well on the back of last week’s PMI numbers, which hints that growth in Europe will advance in the coming quarters,” said Mark Andersen, who helps oversee $1.7 trillion as head of asset allocation at UBS AG in Zurich. “Earnings still need to come in stronger to support equity markets.”
The MSCI Asia Pacific Index declined 1.6 percent today as Japanese retail sales missed economists’ projections and profit growth at China’s industrial companies slowed.
“The China-growth picture remains one of the main worries among investors,” Andersen said. “European exporters need a confirmation that economic growth is finding a floor there.”
Standard & Poor’s 500 Index (SPX) futures slipped 0.1 percent. The benchmark gauge for U.S. shares erased a loss of as much as 0.8 percent in the final 30 minutes of trading on July 26, closing 0.1 percent higher.
A report at 10 a.m. New York time may show U.S. pending home sales slipped 1 percent in June, after climbing 6.7 percent the previous month, according to the median forecast of 34 economists in a Bloomberg survey.
U.S. gross domestic product probably rose 1 percent on an annualized basis in the second quarter, after gaining 1.8 percent in the previous period, data will show on July 31, according a separate survey of economists. Payrolls increased by 185,000 after a 195,000 gain in June, and the jobless rate fell to 7.5 percent from 7.6 percent, according to the median forecast of economists before Labor Department data on Friday.
The Stoxx 600 has gained 5.3 percent in July as the Federal Reserve said it remains flexible on the pace of asset purchases. Fed policy makers begin a two-day meeting tomorrow.
Danone (BN), the owner of Evian bottled water and Activia yogurt, increased 3.1 percent to 59.24 euros. Second-quarter revenue growth topped estimates as the company sold more baby-nutrition products in China and dairy sales rose more than forecast.
Elan jumped 11 percent to 12.41 euros, the highest price in five years, after the Irish drug company agreed to be bought by Perrigo Co., a U.S. maker of over-the-counter medicines.
TNT declined 5.4 percent to 5.81 euros, the largest retreat since March 25. The company reported a second-quarter loss of 304 million euros ($403 million), after a profit of 39 million euros last year.
Barclays fell 3.2 percent to 310.05 pence, the biggest drop in three weeks. The London-based lender favors issuing cheaper CoCos instead of new stock to boost capital, according to two people with knowledge of the talks who asked not to be identified because no decision has been reached.
The bank said it has held talks with the Prudential Regulation Authority and will update the market when it reports earnings tomorrow.
Ryanair Holdings Plc (RYA), Europe’s biggest discount airline, fell 2.5 percent percent to 6.99 euros as first-quarter earnings dropped 21 percent on higher fuel costs and an early Easter travel season.
Publicis Groupe SA (PUB) may move as the Paris-based firm and Omnicom Group Inc. agreed to merge in an all-stock transaction to create the world’s largest advertising company with $23 billion in revenue. Publicis shares are due to begin trading at 3:30 p.m. Paris time, as the New York Stock Exchange opens.
Shareholders of Publicis and New York-based Omnicom will each hold about 50 percent of the new entity, known as Publicis Omnicom Group. Publicis Chief Executive Officer Maurice Levyand John Wren, his counterpart at Omnicom, will be co-CEOs.
WPP Plc, currently the biggest advertising company, advanced 2.2 percent to 1,201 pence in London. Havas SA, a French ad firm, surged 7 percent to 5.78 euros, the highest price in 11 years.