European Stocks Climb for Fifth Day; BMW, Renault Lead Advance

By Sarah Jones

Sept. 9 (Bloomberg) -- European stocks rose for a fifth day, the longest winning streak since July, as gains by carmakers overshadowed speculation that a six-month rally has outpaced the prospects for earnings. Asian shares fell.

Renault SA rallied 5.1 percent as Chief Executive Officer Carlos Ghosn said the worst of the financial crisis is over. Bayerische Motoren Werke AG jumped 5.4 percent after Morgan Stanley and Royal Bank of Scotland Group Plc recommended the German automaker. Cie. Financiere Richemont SA led declining shares as the world’s largest jewelry maker urged “caution” on its sales outlook.

Europe’s Dow Jones Stoxx 600 Index advanced 0.2 percent to 238.42 at 11:35 a.m. in London, after swinging between gains and losses at least five times. The regional gauge, which has surged 51 percent since March 9, is valued at 45.8 times profit, the highest level since 2003, Bloomberg data show.

“When you just look at how much the market has gone up, it could get quite scary and could get an attack of vertigo,” Patrik Schowitz, European equity strategist at Bank of America Securities-Merrill Lynch in London, said in a Bloomberg Television interview. “If you do look at valuations and ignore interest rates, I would say the market is fairly valued.”

The MSCI Asia Pacific Index fell 0.8 percent from a one- year high as Alibaba.com Ltd. and Lenovo Group Ltd. retreated. Futures on the Standard & Poor’s 500 Index were little changed after the benchmark gauge for U.S. stocks climbed for a third consecutive day yesterday.

Renault Rallies

Renault rallied 5.1 percent to 32.83 euros after Ghosn, also chief executive officer of Nissan Motor Co., told Le Figaro in an interview that the worst of the financial crisis is over and a recovery will be “gentle” and spread over several years.

In contrast, European Central Bank President Jean-Claude Trichet said the crisis is not yet finished and it’s important for policy makers to consider how they will withdraw economic stimulus measures.

BMW jumped 5.4 percent to 33.73 euros after Morgan Stanley raised its recommendation for the world’s largest maker of luxury cars to “overweight” from “underweight” and RBS upgraded shares to “buy” from “hold.”

Separately, BMW and Daimler AG’s Mercedes-Benz unit are considering building a joint transmission plant in the U.S., expanding on their cooperation in purchasing.

Daimler added 1.9 percent to 32.79 euros.

Richemont Slips

Richemont dropped 3.9 percent to 28.84 Swiss francs. The jewelry maker said five-month revenue fell 16 percent, missing analysts’ estimates, as wealthy customers reduced spending on Cartier and Montblanc brands.

“Although the rate of decline in sales is slowing, we still urge caution,” Chairman Johann Rupert said.

Lonmin Plc lost 2.3 percent to 1,673 pence. Bank of America Corp. downgraded its recommendation on the third-biggest platinum producer to “neutral” from “buy,” saying a bid from Xstrata Plc was “not a sure thing.”

Petroplus Holdings AG slipped 2 percent to 25.42 francs. Europe’s biggest independent refiner by capacity is offering about $400 million of senior notes and $150 million of new convertible bonds and said it expects to raise about 290 million francs ($277 million) in an equity offering.

Alibaba, owner of China’s biggest electronic-commerce Web site, slumped 6.7 percent to HK$20.20 after Chairman Jack Ma sold 13 million shares at an average price of HK$20.78 apiece. The stock had almost quadrupled this year before today, making it the fifth-best performing member in the MSCI Asia Pacific Information Technology Index.

Lenovo, China’s largest maker of personal computers, fell 5.7 percent to HK$3.45 after TPG Inc., General Atlantic LLC and Newbridge Capital LLC raised HK$1.03 billion ($133 million) selling shares at HK$3.55 apiece.

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