European Stocks Advance, Extending Best Quarter This Decade

By Sarah Jones

Sept. 30 (Bloomberg) -- European stocks rose for a third day, extending the Dow Jones Stoxx 600 Index’s biggest quarterly rally this decade. U.S. index futures and Asian shares gained.

Infineon Technologies AG climbed 6.5 percent after Micron Technology Inc., the biggest U.S. producer of computer-memory chips, reported a smaller-than-estimated loss. Man Group Plc, the largest publicly traded hedge-fund manager, soared 6.2 percent after reporting an increase in assets under management.

The Stoxx 600 rose 0.5 percent to 244.7 as of 8:28 a.m. in London, extending the advance since the end of June to 19 percent. The quarterly increase is the biggest since 1999, while the Standard & Poor’s 500 Index’s 15 percent surge is the steepest since 1998. The gains have sent price-earnings valuations on the indexes this month to the highest levels since 2003 and 2004, respectively.

The market is “certainly pricing in quite a lot of recovery,” said David Crawford, a fund manager at Octopus Investments Ltd. in London. “We haven’t quite hit the buffers, but we don’t see certainly so much upside” as we have seen since March, he told Bloomberg Television.

Futures on the S&P 500 added 0.3 percent before data on gross domestic product, employment and business activity that may show the worst U.S. recession since the Great Depression eased and the economy is probably now in the early stages of recovery.

Asian Stocks, IMF

The MSCI Asia Pacific Index climbed 0.8 percent today, led by automakers and technology companies, after NGK Insulators Ltd. raised its profit forecast and Micron posted a narrower loss.

The International Monetary Fund today cut its projection for global writedowns on loans and investments by 15 percent to $3.4 trillion, citing improvements in credit markets and initial signs of economic growth. Germany’s Handelsblatt newspaper reported that the IMF has raised its global economic growth forecast for next year to 3.1 percent from 2.5 percent.

Separate data from GfK NOP showed U.K. consumer confidence jumped in September by the most since 1995.

Infineon Technologies, Europe’s second-largest maker of semiconductors, climbed 6.5 percent to 3.91 euros. Micron posted a fourth-quarter loss of $88 million, or 10 cents a share, after an industry glut eased and product prices rebounded. Analysts had estimated a loss of 19 cents, according to a Bloomberg survey.

Separately, Exane BNP Paribas upgraded Infineon to “outperform” from “neutral,” citing “evidence of cash generation.”

Man Group, Smiths

Man Group advanced 6.2 percent to 327.3 pence. Funds under management rose to $43.8 billion in the fiscal second quarter from $43.3 billion at the end of June. Investors had expected $43.5 billion, according to three analysts surveyed by Bloomberg.

Smiths Group Plc rallied 7.3 percent to 899 pence after the world’s biggest maker of airport scanners raised its savings target to at least 70 million pounds ($113 million) and reporting pretax profit before one-time items of 371 million pounds. The company also extended a revamp program to its detection-gear division.

Marks & Spencer Group Plc slipped 1.6 percent to 368.7 pence after the U.K.’s largest clothing retailer reported a decline in same-store revenue. Sales at U.K. stores open at least a year fell 0.5 percent in the 13 weeks ended Sept. 26.

Europe’s Stoxx 600 has added 3.7 percent in September, heading for a third straight monthly advance. The S&P 500 has gained 3.9 percent, leaving it poised for a seventh consecutive monthly increase, the longest streak since January 2007. Japan’s Topix index and the Nikkei 225 Stock Average are this month’s worst performers among 88 indexes tracked by Bloomberg, amid uncertainties over policies from the nation’s new government.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.