By Daniela Silberstein
Aug. 6 (Bloomberg) -- Stocks in Europe and Asia rose, led by financial shares as KBC Group NV reported a surprise profit, Aviva Plc posted results that beat estimates and an industry group predicted U.K. house prices will increase this year.
KBC, a recipient of Belgian bank-rescue funds, surged 17 percent while Aviva, the U.K.’s second-biggest insurer by market value, gained 6.2 percent. Unilever, the world’s second-largest consumer-goods maker, added 5.6 percent in Amsterdam after beating analysts’ estimates for western European sales growth.
The MSCI World Index advanced for the fifth time in six days, climbing 0.4 percent at 10:24 a.m. in London. The gauge of 23 developed countries has climbed 55 percent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings.
“The earnings season was pretty impressive and it’s firing this rally were seeing,” Marc-Alexander Kniess, a senior portfolio manager at DWS Investment GmbH in Frankfurt, which has $288 billion under management, told Bloomberg Television. “Interest rates are at low levels so therefore liquidity is there and that should help spark economic recovery.”
Europe’s Dow Jones Stoxx 600 Index added 0.8 percent today before interest-rate decisions from the Bank of England and the European Central Bank. The regional measure is valued at 39.9 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
The MSCI Asia Pacific Index rose 0.7 percent as employers in Australia unexpectedly added jobs and Nippon Telegraph & Telephone Corp. said earnings at its fixed-line units increased.
U.S. Futures
Standard & Poor’s 500 Index futures fluctuated between gains and losses before a weekly report on initial jobless claims. The benchmark gauge for U.S. equities yesterday fell from a nine-month high after data on job losses and service industries were worse than economists estimated.
The Bank of England will announce the Monetary Policy Committee’s monthly decision at 12 p.m. today in London. The bank will keep the benchmark rate at a record low of 0.5 percent, according to all 60 economists in a Bloomberg News survey. Governor Mervyn King may need to spell out the central bank’s next policy step after completing the latest phase of its bond-purchase program, economists say.
U.K. house prices will increase in 2009, the Royal Institution of Chartered Surveyors said, reversing an earlier prediction for a drop of as much as 15 percent. The average price of a home will be “slightly higher” in the fourth quarter of 2009 than it was in the same period last year, RICS said in a statement in London today.
ECB Decision
The European Central Bank will keep its key rate at a record low as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter, economists said. The ECB announces its rate decision at 1:45 p.m. in Frankfurt and President Jean-Claude Trichet holds a press conference 45 minutes later.
KBC surged 17 percent to 19.04 euros. The recipient of 7 billion euros ($10.1 billion) in Belgian bank-rescue funds reported a surprise profit as narrowing credit spreads boosted the value of its collateralized debt obligations.
Aviva increased 6.2 percent to 378.2 pence. The U.K.’s second-biggest insurer by market value swung to a first-half profit as margins on the sale of life insurance policies increased. Net income was 675 million pounds ($1.1 billion), compared with a year-earlier loss of 97 million pounds. Operating profit, measured on a market-consistent embedded value basis, rose to 1.69 billion pounds, exceeding analyst estimates.
Hannover Re, Zurich
Hannover Re climbed 5.8 percent to 29.59 euros. Germany’s second-biggest reinsurer said second-quarter net income doubled, beating estimates as investment income increased.
Zurich Financial Services AG added 2.1 percent to 220.5 Swiss francs. Switzerland’s largest insurer is confident about achieving its mid-term profit goals after beating a 16 percent target for business operating profit return on equity in the first half, Chief Financial Officer Dieter Wemmer said. The company reported a 29 percent decline in second-quarter profit because of lower general insurance earnings and investment losses.
Jyske Bank A/S gained 4.7 percent to 202 kroner. Denmark’s second-largest lender was raised to “buy” from “accumulate” at Svenska Handelsbanken AB, which said loan losses at the Danish bank have peaked and that it expects “strong” net interest income in the third quarter.
Unilever Rises
Unilever, the world’s second-largest consumer goods maker, climbed 5.6 percent to 19.87 euros in Amsterdam. The maker of Blue Band margarines and Knorr soups said that its quantity of goods sold in western Europe rose 1 percent, compared with the median 2 percent decline estimated by nine analysts in a Bloomberg News survey.
Petroplus Holdings AG rallied 8.1 percent to 19.47 francs. The largest independent oil refiner in Europe said second- quarter profit fell 68 percent to $205 million. That beat the $161.5 million median estimate of eight analysts surveyed by Bloomberg.
Veolia Environnement SA, the world’s biggest water company, fell 5.4 percent to 23.04 euros after posting a larger-than- estimated profit decline because of a slowdown in its waste treatment business.
Per-share earnings have slumped 39 percent at companies on the Stoxx 600 while more than half of profits have topped analysts’ projections, according to data compiled by Bloomberg. Of the 221 companies to have reported results since July 8, 112 have beaten estimates, the data show.
Alumina, NTT
Alumina Ltd., partner in the world’s biggest producer of the material used to make aluminum, surged 9.8 percent to A$1.80 in Sydney. The company reported an underlying loss of A$15 million ($12.6 million) in the six months ended June 30, beating the A$22 million median estimate of three analysts compiled by Bloomberg.
NTT, Japan’s biggest phone operator, climbed 2.5 percent to 4,070 yen. The company said yesterday that operating profits at its fixed-line units NTT East Corp. and NTT West Corp. grew at least 76 percent in the three months to June 30.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
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