By Adria Cimino
Dec. 16 (Bloomberg) -- European stocks advanced, led by banking shares, as the Dow Jones Stoxx 600 Index headed for a fifth day of gains, its longest winning streak since September. U.S. stock-index futures rose and Asian shares fluctuated.
Deutsche Bank AG, Germany’s biggest bank, and Commerzbank AG, the second-largest, surged at least 4.6 percent. U.K. homebuilders rallied after Citigroup Inc. advised buying shares of Barratt Developments Plc, Taylor Wimpey Plc and Redrow Plc. Vallourec SA, the second-largest maker of steel tubes for oil and gas production, climbed 4 percent after Goldman Sachs Group Inc. lifted its recommendation on the stock.
The Stoxx 600 gained 0.9 percent to 249.47 at 11:43 a.m. in London, after closing up less than 0.1 percent yesterday. A 58 percent rally since March 9 has left the benchmark gauge for European equities valued at about 56 times its companies’ reported earnings, near the highest level since 2003, weekly data compiled by Bloomberg show.
“The market is poised between the seasonal tendency to take risk off the table, and set against this, the outlook for 2010 steadily improving,” Andrew Bell, equity strategist at Rensburg Sheppards Plc in London, said in a television interview. “The danger is to wait too long and miss the boat on the companies that have been left behind. We’ll continue to see upside in equities” next year.
U.S. Stocks
Federal Reserve Chairman Ben S. Bernanke and his colleagues may indicate the U.S. recovery is gaining strength while repeating a pledge to keep the benchmark interest rate almost at zero for an “extended period.”
The Federal Open Market Committee gathers as growth in the final quarter of 2009 accelerates to more than 4 percent, the fastest pace in almost four years, according to analysts’ forecasts. The FOMC will probably discuss how to eventually withdraw unprecedented programs to revive credit, including purchases of $1.43 trillion in housing debt, economists said.
U.S. stocks fell for the first time in five days yesterday, led by financial shares. Standard & Poor’s 500 Index futures added 0.6 percent today.
European bank stocks gained the most among the 19 industry groups in the Stoxx 600. Global regulators will give banks an unspecified grace period to adopt new capital rules, easing worries that they would have to raise money hurriedly through share sales, Reuters reported, citing unidentified people. Japan’s Nikkei newspaper said that lenders will be given 10 to 20 years to comply.
New Rules
The new rules are being drawn up by the Basel Committee on Banking Supervision, a group of central bankers and regulators from almost 30 countries, which is expected to publish the tighter regulations this week; the regulations will be gradually implemented from 2012, according to Reuters.
Commerzbank soared 6.7 percent to 6.35 euros. Barclays, Britain’s second biggest, advanced 2.4 percent to 291.5 pence.
BNP Paribas SA added 2.4 percent to 55.91 euros. WestLB raised its recommendation on France’s largest bank to “buy” from “add.”
Deutsche Bank AG climbed for a third day, adding 4.6 percent to 51.77 euros. Germany’s biggest lender was raised to “selected list” from “outperform” at CA Cheuvreux, which said “we are very pleased that management is going out on a limb on profitability by giving hard figures” and named the stock as one of its top picks in Germany.
Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. surged more than 14 percent in Asia after the Nikkei newspaper said lenders will be given at least 10 years to comply with stricter international capital rules.
Barratt, Redrow
Barratt Developments, Taylor Wimpey and Redrow were raised to “buy” at Citigroup, which said in a report “we think the negative market sentiment is overdone and that the whole sector now looks good value on a 12-month basis.”
Barratt advanced 5.9 percent to 115.9 pence. Taylor Wimpey added 3.3 percent to 35.05 pence. Redrow surged 7.4 percent to 131.5 pence.
Vallourec rose 4 percent to 121.05 euros. Goldman Sachs lifted its recommendation on the shares to “buy” from “neutral” and added them to its “conviction” list.
“We believe Vallourec’s order intake for high-margin premium seamless tubes will improve through 2010, leading to a significant margin recovery in 2011,” the analysts wrote.
Aircraft Seats
Zodiac Aerospace surged 6.9 percent to 28.38 euros, the biggest gain on the Stoxx 600. The maker of aircraft seats and automotive components said it will post net profit for 2009/2010 and said the economic situation in the industry should improve during 2011. Zodiac reported a 15 percent fall in first-quarter revenue to 471.5 million euros ($686 million), as orders from the aerospace industry were hit by the economic slowdown.
JCDecaux SA advanced 4.9 percent to 17 euros. The world’s second-biggest seller of outdoor advertising was upgraded to “neutral” from “reduce” at Nomura Holdings Inc.
Acciona SA rallied 4 percent to 89.70 euros. The world’s second-largest wind-farm operator said that 36 renewable energy projects totaling 1,104 megawatts of power were included in the registry of Spain’s Industry Ministry. The five thermosolar plants, 29 wind parks and two biomass plants will be able benefit from subsidized power rates.
TUI, Punch
TUI AG jumped 6.2 percent to 5.76 euros. The travel company that’s helping bail out the Hapag-Lloyd shipping line was raised to “outperform” from “underperform” at Cheuvreux, which said “the operating risks at Hapag Lloyd appear to have decreased.”
Punch Taverns Plc slumped 3.5 percent to 78.25 pence. The largest U.K. pub owner said trading in the 16 weeks until Dec. 12 “remained difficult” and operating margins have “stabilized.”
“The challenging economic environment and our smaller pub estate will affect profitability in the short-term.” The Burton upon Trent, England-based company said in a statement today. “Underlying operating margins have now stabilized as we see the benefit of further efficiency improvements.”
Bank of Ireland Plc fell 4.8 percent to 1.33 euros after central bank Governor Patrick Honohan said it’s “quite possible” the government may end up with 50 percent of one or both of the country’s biggest banks. Honohan told a parliamentary committee yesterday that lenders may need significant new capital after the country’s so-called bad bank buys loans from them at a discount.
Bad Loans
China Construction Bank Corp. sank 2.1 percent in Hong Kong. China’s banks will face risks from bad loans and lending concentration to certain industries and big customers for a “long period of time,” Wang Huaqing, disciplinary commissioner of the China Banking Regulatory Commission, said at a forum in Beijing today.
Builders in November probably broke ground on more U.S. homes, and gains in consumer prices were within the Fed’s long-term forecasts, economists said reports set for 8:30 a.m. in Washington may show.
Housing starts rose 8.5 percent to an annual rate of 574,000, according to the median forecast of 78 economists surveyed by Bloomberg News. A Labor Department report may show the cost of living climbed 0.4 percent last month.
The Labor Department’s report may show consumer prices compared with the same time last year rose 1.8 percent, according to the survey median.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
Posts
No comments:
Post a Comment