European Stocks Gain, Led by Retailers; Asian Shares Decline

By Daniela Silberstein

Dec. 10 (Bloomberg) -- European stocks advanced, snapping three days of declines for the Dow Jones Stoxx 600 Index, as retailers gained after Inditex SA reported earnings that beat analysts’ estimates. Asian shares fell.

Inditex, the world’s biggest clothing retailer, rose 2.3 percent. ING Groep NV rallied 4.2 percent after BofA Merrill Lynch Global Research recommended the shares. Mazda Motor Corp. lost 3 percent in Tokyo amid concern gains in the yen will hurt Japan’s export earnings.

Europe’s Stoxx 600 added 0.8 percent to 243.45 as of 10:25 a.m. in London. The gauge climbed 59 percent from March 9 to Nov. 11 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy. The measure is valued at about 55 times its companies’ reported earnings, near the highest level since 2003, data compiled by Bloomberg show.

The MSCI Asia Pacific Index fell 0.8 percent today, extending yesterday’s 0.7 percent drop, as China scrapped a tax break on property sales. Futures on the Standard & Poor’s 500 Index rose 0.3 percent.

Inditex gained 2.3 percent to 42.21 euros. The owner of the Zara chain said net income declined to 831 million euros ($1.2 billion) in the nine months through October from 843 million euros in the year-earlier period. The average estimate of seven analysts compiled by Bloomberg was 807 million euros.

Retailers Rise

A gauge of retailers in the Stoxx 600 advanced 1.2 percent, snapping a three-day drop. Kesa Electricals Plc added 2.6 percent to 158.8 pence as Deutsche Bank AG upgraded Europe’s third-largest electronics retailer to “buy” from “hold,” saying “a healthy recovery looks likely.”

ING climbed 4.2 percent to 5.85 euros. The Netherlands’ biggest financial-services company was added to BofA Merrill Lynch’s “Europe 1” list.

Irish Life & Permanent Plc increased 1.2 percent to 3.29 euros. Ireland’s biggest mortgage lender was raised to “buy” from “hold” at Citigroup Inc., which said “the market will increasingly focus on fundamental valuation.”

Japanese automakers fell after the yen appreciated to as much as 87.37 per dollar yesterday, a level not seen since Dec. 3. A stronger yen reduces the value of overseas sales at Japanese companies when converted into their home currency. Mazda, Japan’s fourth-largest automaker, lost 3 percent to 195 yen in Tokyo, while Honda Motor Co., which gets 42 percent of its sales in North America, slipped 1.5 percent to 2,930 yen.

China Vanke Co., the nation’s biggest listed developer, dropped 1 percent to 11.91 yuan after the government extended the period of a sales tax on homes.

Spain, Greece

The Stoxx 600 fell for the first three days of this week as Spain’s credit outlook was reduced to negative from stable by Standard & Poor’s Ratings Services and Fitch Ratings downgraded Greece. The reliability of sovereign credit has come under increased scrutiny since Nov. 25, when Dubai World, a state- owned holding company, said it would seek a standstill agreement on its debt. The company has since said it’s in talks to renegotiate $26 billion of loans.

National Bank of Greece SA, the country’s biggest bank, rose 2.9 percent to 17.49 euros as the European Union’s Jean- Claude Juncker said he rules out a Greek state bankruptcy.

“I completely rule out a bankruptcy of the Greek state,” Juncker, who chairs a group of euro-area finance ministers, told reporters in Bonn. Asked if the EU would need to assist Greece, he said “this won’t be necessary.”

BOE Bond Purchases

The Bank of England will probably today stick to its plan to spend 200 billion pounds ($324 billion) on bonds as officials seek to cement Britain’s recovery from recession.

The Monetary Policy Committee, led by Governor Mervyn King, will keep the purchase program unchanged, according to all 38 economists in a Bloomberg News survey. The bank will also keep its benchmark interest rate at a record low of 0.5 percent, according to all 53 economists in a separate survey. The BOE will announce today’s decision at 12 p.m. in London.

Switzerland’s central bank left its benchmark rate unchanged today and said officials will end some emergency measures as they try to nurture the economy’s recovery from the deepest recession in three decades.

A report from the U.S. Labor Department at 8:30 a.m. New York time may show the number of Americans filing first-time claims for unemployment insurance fell to 455,000 last week, the fewest since September 2008, according to the median estimate of economists in a Bloomberg survey.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.