By Daniela Silberstein
Sept. 4 (Bloomberg) -- European stocks rose for a second day as metals gained and strategists increased their year-end forecasts for the region’s equity indexes. U.S. futures climbed after the smallest decline in payrolls since August 2008.
Kazakhmys Plc jumped 4.7 percent as copper advanced and Morgan Stanley upgraded Kazakhstan’s biggest producer of the metal. Lonmin Plc, the world’s third-largest platinum producer, jumped 7.8 percent after Exane BNP Paribas recommended the shares. PSA Peugeot Citroen rallied 6.9 percent as the automaker signed an agreement with Mitsubishi Motors Corp. to develop electric cars.
Europe’s Dow Jones Stoxx 600 Index advanced 1.5 percent to 234.08 at 1:40 p.m. in London. The measure has fallen 1.4 percent this week on concern that a six-month surge has outpaced the prospects for earnings and economic growth. The regional gauge is valued at 44.8 times profit, near the highest level since September 2003, according to data compiled by Bloomberg.
The rally “does not mean that the market can make no further progress,” Peter Oppenheimer, a London-based strategist at Goldman Sachs Group Inc., wrote in a report, raising his year-end forecast for the Stoxx 600 to 260 from 235. “Investors may now generally require new information for the market to move higher, but we think the better news will come.”
The Stoxx 600 has surged 48 percent since March 9 as companies from L’Oreal SA to GlaxoSmithKline Plc reported higher-than-estimated profits and the German and French economies unexpectedly expanded. UBS AG strategist Nick Nelson increased his year-end target for the FTSEurofirst 300 Index to 1,100 from 1,000 today.
U.S. Jobless
Futures on the Standard & Poor’s 500 Index gained 0.7 percent after a Labor Department report showed employers in the U.S. cut 216,000 jobs in August, a smaller drop than forecast. The U.S. unemployment rate increased to 9.7 percent, the highest since 1983.
Canada unexpectedly added 27,100 jobs in August, the first gain in four months, Statistics Canada said today in Ottawa.
The MSCI Asia Pacific Index increased 0.5 percent as the Shanghai Composite Index climbed for a fourth day.
Economic policy makers are signaling they plan to leave emergency stimulus in place even as the global economy pulls out of recession, delivering what Credit Suisse Group AG and Bank of America Corp. call a “sweet spot” for financial markets.
Declare Victory
U.S. Treasury Secretary Timothy Geithner and European Central Bank President Jean-Claude Trichet are among Group of 20 finance officials gathering in London today who say it’s too soon to declare victory over the deepest recession since World War II. While data this week confirmed the slump is easing, policy makers are unwilling to curb spending or start unwinding their record low interest rates and debt purchases.
“Economies look like they are beginning to grow,” Alex Crooke, portfolio manager at Henderson Global Investors in London, which manages about $125 billion, said in a Bloomberg Television interview. “September could be another good month.”
Kazakhmys increased 4.7 percent to 992.5 pence after Morgan Stanley upgraded the shares to “overweight” from “equal weight.”
Lead, the best performer on the London Metal Exchange this year, rallied to the highest price in almost 16 months as China vowed to shut substandard smelters after thousands of children were poisoned. Copper, aluminum, nickel and tin also advanced.
Lonmin surged 7.8 percent to 1,554 pence. Exane upgraded the shares to “outperform” from “underperform,” citing the possibility that Xstrata Plc may bid for the company. Xstrata added 1.9 percent to 833 pence.
Zijin, Rio Tinto
Zijin Mining Group Co., China’s biggest gold mining company, climbed 2.2 percent to HK$7.03 in Hong Kong as the precious metal traded near a six-month high.
Rio Tinto Group added 2.6 percent to 2,407 pence. The world’s third-largest mining company said it’s still selling iron ore to China at a provisional price as benchmark negotiations with the Asian nation remain stalled.
A gauge of automakers in the Stoxx 600 rose 3.7 percent, the steepest advance among 19 industry groups.
Peugeot rallied 6.9 percent to 19.95 euros after signing an agreement with Mitsubishi Motors to develop a vehicle based on Mitsubishi’s i-MiEV electric car to be sold in Europe by October 2010 under the Peugeot and Citroen brands.
UBS raised its recommendation on Europe’s second-biggest carmaker to “neutral” from “sell.”
Daimler Gains
Daimler AG climbed 5 percent to 31.79 euros. The world’s second-largest maker of luxury cars doesn’t plan to cut jobs for the moment and will trim costs by more than the 4 billion euros ($5.7 billion) planned for 2009, Bild Zeitung reported, citing an interview with Chief Executive Officer Dieter Zetsche.
Banks in the Stoxx 600 rose 1.8 percent. Goldman Sachs upgraded its recommendation on banks to a “modest overweight” from “neutral.” Commerzbank AG, Germany’s second-largest bank, added 5.3 percent to 7.01 euros. Credit Suisse Group AG, the biggest Swiss bank by market value, increased 2.3 percent to 52.7 Swiss francs.
Celesio AG jumped 3.7 percent to 18.97 euros after the German drug wholesaler repeated its outlook for earnings before interest, tax, depreciation and amortization of just over 600 million euros this year.
Deutsche Telekom AG advanced 2.7 percent to 9.38 euros. Europe’s biggest phone company has started talks with Vodafone Group Plc, France Telecom SA and Telefonica SA about selling its T-Mobile U.K. unit, the Financial Times reported, citing people familiar with the situation.
Elan Corp. sank 7 percent to 4.79 euros after a U.S. judge ruled the drug company breached a contract with Biogen Idec Inc. by entering into a transaction with Johnson & Johnson.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
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