European Stocks Climb Most in a Month; Barclays, BHP Advance

By Adam Haigh

Sept. 13 (Bloomberg) -- European stocks had the biggest weekly gain in a month, led by banks and raw-material producers, as concern eased that losses in the financial industry will worsen and higher metals prices lifted mining shares.

Barclays Plc added 10 percent and Credit Suisse Group AG rose 7 percent as the U.S. government provided funding to Fannie Mae and Freddie Mac, the biggest U.S. mortgage-finance companies. BHP Billiton Ltd., the world's largest mining company, climbed 4.9 percent as copper rebounded. ITV Plc rallied 21 percent as Mediaset SpA reiterated interest in the U.K.'s biggest commercial broadcaster.

Europe's Dow Jones Stoxx 600 Index added 3 percent to 280.41, trimming this year's decline to 23 percent. Almost $16 trillion has been erased from global equities in 2008 as the first nationwide decline in U.S. home prices since the Great Depression sparked more than $510 billion in credit-related losses worldwide and threatened economic growth.

``People will start to see some light at the end of the tunnel now'' for financial companies, said William De Vijlder, chief investment officer at Fortis Investments, which has the equivalent of $309 in assets under management. ``We still believe we are in a commodities bull market,'' he said in a Bloomberg Television interview.

National benchmark indexes advanced in 14 of the 18 western European markets this week. France's CAC 40 gained 3.2 percent, and Germany's DAX added 1.8 percent. The U.K.'s FTSE 100 Index increased 3.4 percent this week. A computer fault on Sept. 8 left some traders without prices and unable to buy or sell shares in London for more than six hours.

Bank Shares

Barclays, the U.K.'s third-largest bank, climbed 10 percent. Credit Suisse Group AG, Switzerland's second-biggest bank, increased 7 percent.

Treasury Secretary Henry Paulson said Sept. 7 the U.S. government will provide short-term funding to Fannie and Freddie and purchase debt backed by home loans. Paulson and Federal Housing Finance Agency Director James Lockhart placed the companies in a government-operated conservatorship.

Investors speculated Sept. 12 that Lehman Brothers Holdings Inc. will be bought after the stock erased more than 70 percent of its value this week on a larger-than-estimated loss for the third quarter.

Rising metal prices helped send a measure of raw-material producers to the steepest gain among 18 industry groups in the Stoxx 600, adding 5.4 percent. Copper rallied 3.4 percent in London this week, snapping a two-week decline. Nickel and tin also advanced.

Takeover Speculation

BHP increased 4.9 percent. Anglo American Plc, the world's fourth-biggest diversified mining company, rallied 8.6 percent.

ITV soared 21 percent, leading gains among media stocks in the Stoxx 600 and posting the steepest advance among all shares in the measure.

Mediaset, Italy's largest independent broadcaster and controlled by Italian Prime Minister Silvio Berlusconi, is looking at possible acquisitions, including ITV, Mediaset director Gina Nieri told the Telegraph newspaper. She said there are ``no real negotiations,'' according to the report on Sept. 6.

Separately, ITV named Ian Griffiths as group finance director to help revive the company.

Ciba Holding AG, the world's largest maker of colors for plastics, surged 18 on speculation that the company may be a takeover target for bigger chemical companies. Ciba spokesman Tobias Woelfing said the company doesn't comment on market ``rumors.''

`Positive'

British Land Co., the U.K.'s largest real-estate investment trust by assets, led British real-estate stocks higher after Lehman lifted its recommendation for the industry to ``positive'' from ``neutral.'' The stock soared 14 percent.

Stora Enso Oyj and UPM-Kymmene Oyj, Europe's biggest papermakers, surged after saying they plan to close unprofitable production lines and cut 3,300 jobs. Stora rallied 18 percent, while UPM gained 9.6 percent.

BG Group Plc added 13 percent. Citigroup Inc. recommended buying the shares after the U.K.'s third-largest oil and natural-gas producer reported exploration success in Brazil this week. The company, together with partners Petroleo Brasileiro SA and Portugal's Galp Energia SGPS SA, found ``another first- class'' oil field in the Santos Basin offshore Brazil, BG said.

Enterprise Inns Plc tumbled 17 percent after Britain's second-biggest pub landlord was removed from the FTSE 100 Index and Morgan Stanley downgraded the shares to ``underweight'' from ``equal-weight.''

``We continue to recommend investors avoid leased or tenanted pub companies, as trading remains poor,'' analyst Jamie Rollo wrote in a report.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.