Tuesday, 30 July 2013

Most European Stocks Advance as EDF, Alcatel-Lucent Rally

By Inyoung Hwang - Jul 30, 2013 4:36 AM PT
European stocks advanced as investors weighed corporate earnings results and the Federal Reserve began a two-day policy meeting. U.S. index futures and Asian shares gained.
Electricite de France SA, Europe’s biggest power generator, and Alcatel-Lucent (ALU) SA, a French maker of phone equipment, jumped more than 7 percent as profit beat estimates. Barclays Plc sank the most in a year after announcing a rights offering and saying income fell. K+S AG, Europe’s largest potash producer, plunged 23 percent as OAO Uralkali predicted prices for the fertilizer ingredient will fall.
July 30 (Bloomberg) -- Bob Dudley, chief executive officer of BP Plc, talks with Bloomberg Television's Ryan Chilcote in London about BP's partnership with OAO Rosneft, dividend policy and operating cash flow. (Source: Bloomberg)
The Stoxx Europe 600 Index added 0.2 percent to 299.67 at 12:35 p.m. in London, as two shares rose for each one that fell. The gauge has rallied 4.9 percent in July, the biggest gain since October 2011, as the Fed said it remains flexible on the pace of asset purchases. The U.S. central bank starts a two-day meeting today and the European Central Bank and the Bank of England announce policy decisions on Thursday.
“One of the underlying messages of this earnings season is that Europe is no longer the big source of disappointment,” Graham Bishop, the London-based senior equity strategist at Exane BNP Paribas, said by telephone. “If you dig down below the headlines, it looks to me like European revenues are no longer as disappointing.”
Standard & Poor’s 500 Index futures added 0.3 percent today, while the MSCI Asia Pacific Index gained 0.6 percent, climbing for the first time in a week. The volume of shares changing hands in Stoxx 600 companies was 4.1 percent lower than the 30-day average, data compiled by Bloomberg show.

EDF Gains

EDF rose 7.4 percent to 21.73 euros, the highest price in 20 months, as the company reported a 3.5 percent increase in first-half profit on cold weather. Earnings before interest, taxes, depreciation and amortization of 9.7 billion euros (12.9 billion) beat the 9.24 billion-euro median estimate of five analysts surveyed by Bloomberg.
Alcatel-Lucent rallied 9.5 percent to 1.75 euros, the highest since April 2012, after reporting second-quarter sales and earnings that surpassed analysts’ estimates and saying Qualcomm Inc. agreed to buy a minority stake.
International Personal Finance Plc (IPF) jumped 13 percent to 640 pence, the highest price since the company started trading on the London Stock Exchange in July 2007 after being split off from Provident Financial Plc. The home-credit business, which offers unsecured loans to low-income households in eastern Europe and Mexico, posted first-half pretax profit that beat estimates and announced a share buyback program.

Barclays Drops

Barclays plummeted 7.2 percent to 286.80 pence, the biggest decline since June 2012. The U.K.’s second-largest bank by assets announced plans to raise 5.8 billion pounds ($8.9 billion) in a rights offering to boost capital as first-half profit retreated 17 percent.
Deutsche Bank AG slid 3.3 percent to 34.71 euros after continental Europe’s biggest bank said second-quarter profit fell 49 percent. Net income in the three months through June declined to 334 million euros, missing the 767.6 million-euro average estimate of nine analysts surveyed by Bloomberg.
K+S plunged 24 percent to 20.16 euros for the biggest slide since at least 1998. Uralkali, the world’s largest potash producer, forecast global prices will fall about 25 percent as it quits a trade venture with Belarusian Potash Co. and boosts shipments independently to countries including China.

BP Results

BP Plc sank 4.6 percent to 446.05 pence. Europe’s second-biggest oil company said second-quarter earnings adjusted for one-time items and inventory changes fell to $2.7 billion from $3.6 billion a year earlier, missing the $3.4 billion average estimate of 13 analysts in a Bloomberg survey.
Oil and gas companies posted the biggest decline out of 19 industry groups in the Stoxx 600, erasing 0.9 percent. Banks posted the second-largest losses, falling 0.4 percent.
Rheinmetall AG tumbled 14 percent, the most since October 2008, to 34.60 euros. The maker of armored military vehicles cut its estimate for full-year operating profit at its defense unit by half as sales fell short of plans.
To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net