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Wednesday, 14 August 2013
European Stocks Climb for Fifth Day on Euro-Area Growth
By Tom Stoukas - Aug 14, 2013 6:11 AM PT
European stocks rose for a fifth day, extending an 11-week high, as a report showed the euro area’s economy emerged from a record-long recession in the second quarter.
Subsea 7 SA (SUBC), an offshore oil services provider, surged the most in two years after reporting a smaller-than-expected quarterly loss. RWE AG lost 4.4 percent after second-quarter profit missed analysts’ estimates. Celesio AG slipped 1.6 percent after the pharmaceutical wholesaler cut its full-year earnings forecast.
A trader walks across the trading floor at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
The Stoxx Europe 600 Index rose 0.3 percent to 308.64 at 2:08 p.m. in London. The gauge has rallied 12 percent since reaching a low on June 24 amid better-than-forecast economic data and as central banks signaled interest rates will remain low for an extended period.
“Europe is showing signs of life and is exiting recession earlier than many expected,” Witold Bahrke, a Copenhagen-based senior strategist at PFA Pension A/S, which manages about $55 billion, wrote in an e-mail. “More forward looking indicators are pointing at further re-acceleration in the coming quarters, which is very good news.”
Gross domestic product in the 17-nation euro area expanded 0.3 percent in the April-June period after a 0.3 percent contraction in the previous three months, the European Union’s statistics office in Luxembourg said today. That exceeded the median estimate of 0.2 percent growth in a Bloomberg News survey of 41 economists. From a year earlier, the economy shrank 0.7 percent in the second quarter.
The German economy expanded 0.7 percent in the second quarter and French GDP gained 0.5 percent. Portugal’s economy grew 1.1 percent after shrinking in the 10 previous quarters. Economists had predicted a rise of 0.1 percent.
The Stoxx 600 has still declined 0.7 percent from its peak on May 22 as Federal Reserve Chairman Ben S. Bernanke indicated the U.S. central bank could pare stimulus measures if the economy improves as forecast.
The Federal Open Market Committee will probably reduce its $85 billion in monthly bond buying at its next meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a cut in purchases at that meeting.