Financial news, relevant trading information, and transparent commentary issues concerning all major markets.
Monday, 8 July 2013
European Stocks Rise as Portugal Reaches Coalition Deal
By Corinne Gretler - Jul 8, 2013 6:06 PM GMT+0400
European stocks rose, rebounding from their biggest decline in almost two weeks, amid speculation that economic data will improve and as Portugal’s politicians reached an agreement to hold the governing coalition together.
Novartis AG climbed 1.6 percent after saying a psoriasis treatment met all its objectives in a clinical study. Lloyds Banking Group Plc advanced 3.9 percent after a person with knowledge of the matter said a former Standard Chartered Plc executive may mount a bid for a stake in the U.K.’s biggest mortgage lender. TGS Nopec Geophysical ASA declined the most since May 2012 after cutting its full-year revenue guidance.
July 8 (Bloomberg) -- John Meyer, an analyst at SP Angel Corporate Finance LLP, discusses Alcoa Inc., the aluminum producer which kicks off the U.S. earnings season today. He talks with Francine Lacqua on Bloomberg Television's "On the Move." (Source: Bloomberg)
The Stoxx Europe 600 Index added 1.7 percent to 293.29 at 3:05 p.m. in London. The gauge rose 1.2 percent last week as the European Central Bank and the Bank of England said interest rates will remain low for an extended period of time. The equity benchmark has still fallen 5.6 percent since May 22, when Fed Chairman Ben S. Bernanke indicated that the central bank may reduce its asset purchases if the economy improves in line with its forecasts.
“The world looks rosy to investors again, after the U.S. market rallied on much better-than-expected employment numbers that investors finally seem to be interpreting as good news,”John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP in Geneva, wrote. “We have reached a point where markets will reflect the real economy more.”
In Portugal, Prime Minister Pedro Passos Coelho proposed that Paulo Portas, leader of the junior party in the governing coalition, become vice premier. The appointment helps cement a deal to hold the coalition together. Portugal’s PSI 20 Index retreated 2.7 percent last week when Portas resigned after Coelho appointed a new finance minister.
Euro-area finance ministers meeting in Brussels discussed Greece’s progress in meeting the conditions needed to obtain further aid from the International Monetary Fund, European Central Bank and European Commission.
Approval of an agreement at the meeting of euro-area finance ministers in Brussels would allow Greece, which has been unable to tap bond markets since 2010, to obtain a loan of 8.1 billion euros ($10.4 billion).
In Germany, a report showed that industrial production declined 1 percent in May, more than the 0.5 percent drop, which was the median forecast of 38 economists in a Bloomberg News survey. It surged a revised 2 percent in April.
Alcoa Inc. will unofficially start the second-quarter U.S. earnings season after the market closes today, when the biggest U.S. aluminum producer becomes the first company in the Dow Jones Industrial Average to report results.
“With analysts having downgraded their expectations in recent weeks, we should be seeing fewer negative surprises in the U.S. earnings season,” Plassard said. “So sentiment is quite good before Alcoa reports numbers”
National benchmark indexes advanced in all 18 western-European markets today. France’s CAC 40 gained 2.1 percent and Germany’s DAX climbed 2.5 percent. The U.K.’s FTSE 100 added 1.4 percent. Portugal’s PSI 20 rallied 2.6 percent.
Novartis climbed 1.6 percent to 68.70 Swiss francs, contributing the most to the Stoxx 600’s gain, as the company said its secukinumab drug proved better at clearing the skin of people with plaque psoriasis than Enbrel.
Lloyds advanced 3.9 percent to 67.2 pence. Former Standard Chartered Chairman Mervyn Davies is assembling a group of investors to bid for part of the U.K. government’s 39 percent stake in the lender, according to a person with knowledge of the talks. The group has yet to reach an agreement with the Treasury, the person added.
Bovis Homes Group Plc jumped 6.5 percent to 825 pence after the U.K. housebuilder said that increased volume and higher margins led to a bigger profit in the first half. The company said it will probably report a housing gross margin of about 23 percent, compared with 20.9 percent a year earlier.
Hikma Pharmaceuticals Plc surged 6.1 percent to 1,055 pence, its highest price since at least November 2005, after the company raised its full-year revenue forecast. It predicted that group revenue will grow by about 17 percent in 2013, compared with a previous projection of about 13 percent.
TGS slumped 7.8 percent to 176.20 kroner as Norway’s largest surveyor of underwater oil-and-gas fields lowered its forecast for full-year revenue to $920 million to $1 billion because of lower-than-expected demand from industry. It had projected sales of $970 million to $1.05 billion.
Osram Licht AG traded at 23.50 euros after opening at 24 euros in its first day of trading in Frankfurt. Siemens AG, which spun off Osram, rallied 4.3 percent to 78.34 euros.
Chr. Hansen A/S slid 1.7 percent to 185.90 kroner after Credit Suisse Group AG cut the stock to neutral, the equivalent of hold, from outperform. The brokerage said that profit from its natural-color business remains under pressure. The world’s biggest maker of dairy enzymes cut its full-year sales forecast on July 3 because of lower prices for the red pigment carmine.