Thursday, 18 July 2013

European Stocks Rise to Six-Week High as Publicis Climbs

By Jonathan Morgan - Jul 18, 2013 8:06 PM GMT+0400
European stocks climbed to a six-week high as Publicis (PUB) Groupe SA posted increased profit, London Stock Exchange Group Plc reported higher revenue and fewer Americans than forecast filed jobless-benefit claims.
Publicis, the world’s third-biggest advertising company, advanced 3.4 percent and LSE surged to a five-year high. Banca Popolare di Milano Scrl, Italy’s oldest cooperative bank, and Spain’s Bankinter SA led a rally in financial companies. Ericsson (ERICB) AB, the largest maker of wireless-network equipment, and Nokia Oyj, the Finnish mobile-phone maker, retreated more than 2.5 percent as sales missed estimates.
Most European Stocks Gain; Publicis Climbs as Ericsson Slides
A financial trader monitors data on computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
July 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke comments on the central bank's asset purchases and the U.S. economy in testimony before the House Financial Services Committee in Washington. (Excerpts. Source: Bloomberg)
The Stoxx Europe 600 Index rose 0.9 percent to 299.76 at the close, the highest level since May 31. The gauge increased 0.6 percent yesterday as Federal Reserve Chairman Ben S. Bernanke said the pace of the economic recovery will determine when the U.S. central bank starts reducing its program of quantitative easing.
“Markets are embracing bullish sentiment given that markets will rise as good data continues, or be supported by policy if good economic data fades,” Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich, wrote in e-mailed comments. “It is still perceived as a low-risk investing environment by most.”
The volume of shares changing hands in Stoxx 600 companies today was 4.5 percent less than the 30-day average, according to data compiled by Bloomberg. The benchmark index hasrallied 7.2 percent this year, led by gains in financial-services and automobile companies.

‘QE Tapering’

“Bernanke’s remarks yesterday, albeit nothing new came out, set the stage for QE tapering conditioned on the data,” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen, wrote in an e-mail. “That it will likely not lead to higher rates going forward, which is positive for equities.”
U.S. jobless-benefit claims dropped by 24,000 to 334,000 last week, the fewest since early May, Labor Department figures showed today. The median forecast of 49 economists surveyed by Bloomberg projected a reading of 345,000.
A gauge of manufacturing in the Philadelphia region increased to 19.8 in July, the highest level since March 2011, from 12.5 the prior month. Readings greater than zero signal expansion. The median forecast of economists surveyed by Bloomberg called for a reading of 8.
National benchmark indexes advanced in all of the 18 western European markets, exceptNorwayGermany’s DAX and the U.K.’s FTSE 100 (UKX) rallied 1 percent, while France’s CAC 40 rose 1.4 percent.

Publicis, WPP

Publicis climbed 3.4 percent to 59.80 euros in Paris trading as first-half net income rose 15 percent to 314 million euros ($411 million). Revenue increased 8.7 percent to 3.35 billion euros, topping the 3.31 billion-euro average of five analysts’ estimates compiled by Bloomberg.
WPP Plc (WPP), the world’s biggest advertising company, advanced 3.6 percent to 1,210 pence in London trading.
LSE advanced 7.4 percent to 1,590 pence, the highest price since February 2008, as the operator of Europe’s oldest independent bourse reported a 39 percent increase in first-quarter revenue.
A gauge of banks posted the biggest gain among 19 industry groups in the Stoxx 600. Popolare di Milano surged 8.7 percent to 36.3 euros cents and Bankinter rallied 8.5 percent to 3.06 euros in Madrid. France’s Credit Agricole SA soared 5.3 percent to 7.12 euros.
BioMerieux (BIM) jumped 3.8 percent to 76.53 euros, the largest gain in eight months. The French maker of tests for HIV and hepatitis reported sales for the first half of 754 million euros and confirmed its revenue-growth forecast.

Ericsson Falls

Ericsson retreated 4.8 percent to 75.75 kronor after it reported revenue that missed estimates as competition with Huawei Technologies Co. for contracts to build and service phone systems intensified. Second-quarter sales were little changed at 55.3 billion kronor ($8.4 billion), compared with the 56 billion-krona average forecast of analysts compiled by Bloomberg. Ericsson’s gross margin, a measure of profitability, also fell short of estimates.
Nokia declined 2.8 percent to 3.01 euros after the phone maker reported second-quarter revenue that trailed analysts’ estimates as handset demand fell.
Akzo Nobel NV (AKZA) tumbled 8 percent to 43.52 euros, the biggest slide since 2008. Europe’s largest paintmaker reported a 14 percent decline in second-quarter earnings before interest, taxes, depreciation and amortization to 474 million euros. Sales fell 4 percent to 3.87 billion euros. Analysts had predicted 3.9 billion euros in revenue on average, based on estimates collated by Bloomberg.
Orkla ASA (ORK), the Norwegian industrial conglomerate transforming itself into a consumer-goods producer, slumped 11 percent to 46.78 kroner, the largest drop since November 2011. The company reported second-quarter pretax profit of 514 million kroner ($86 million), missing estimates of 965 million kroner in a Bloomberg survey of analysts.
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To contact the editor responsible for this story: Andrew Rummer at