By Peter Levring - Oct 26, 2011 9:25 PM GMT+0700
Oct. 26 (Bloomberg) -- Patrick Perret-Green, Singapore-based head of foreign-exchange and rates at Citigroup Inc., discusses the European sovereign debt crisis and the outlook for the euro. He speaks from Singapore with Linzie Janis and Linda Yueh on Bloomberg Television's "Countdown." (Source: Bloomberg)
European stocks advanced as the region’s leaders prepared to gather in Brussels for the second summit in four days to address the debt crisis and U.S. durable- goods orders topped forecasts.
Merck KGaA, a German drugmaker, climbed the most in more than two years after reporting earnings that beat analysts’ estimates. Nyrstar NV slid 6.8 percent as the biggest producer of refined zinc lowered its mine-output forecast.
The benchmark Stoxx Europe 600 Index advanced 0.5 percent to 241.39 at 3:24 p.m. in London, paring gains as a European Union official said talks with banks on the bondholder losses to be taken as part of a second Greek rescue package are deadlocked. The measure has climbed 12 percent from this year’s low on Sept. 22.
“Markets know what may come from Brussels tonight will not be a full and final solution,” said Thomas Haerter, chief strategist at Swisscanto Asset Management AG in Zurich, who helps oversee about $67 billion. “The problem will only ultimately be solved when debt ratios are much lower in the problem countries than they are today.”
European leaders are traveling to Brussels for the 14th crisis summit in 21 months to discuss Greece’s second bailout, the recapitalization of banks and strengthening the 440 billion- euro ($612 billion) rescue fund into a more potent weapon.
Bailout Capacity
German lawmakers backed increasing the bailout fund’s capacity today, removing one hurdle in the path of a regional agreement. EU leaders may ask national finance ministers to determine the firepower of the expanded European Financial Stability Facility by the end of November, an EU official said.
National benchmark indexes climbed in all of the 18 western European markets, except Portugal and Austria. The U.K.’s FTSE 100 rose 0.5 percent, Germany’s DAX gained 1.1 percent and France’s CAC 40 advanced 1.5 percent.
The Stoxx 600 is trading at 10.3 times the estimated earnings of its companies, compared with the two-year low of 9.1 reached on Sept. 23, according to data compiled by Bloomberg. Of the 69 companies in the Stoxx 600 that have released earnings since Oct. 11, almost the same number have missed analyst profit estimates as beaten, Bloomberg data show.
Orders for U.S. durable goods excluding transportation equipment rose in September by the most in six months, showing manufacturing is supporting the expansion. Demand for goods meant to last at least three years, outside of airplanes and automobiles, climbed 1.7 percent, exceeding the median forecast of economists surveyed by Bloomberg News that called for a 0.4 percent increase, figures from the Commerce Department showed.
Merck Gains
Merck KGaA advanced 8.5 percent to 65.09 euros, the biggest gain since January 2009. The German maker of cancer drug Erbitux reported third-quarter profit that beat analysts’ estimates because of growth at the Merck Serono pharmaceutical and Millipore equipment businesses.
Pandora A/S, the Danish jewelry maker that plunged 65 percent on Aug. 2 after cutting its full-year forecast, advanced 18 percent to 50.30 kroner.
“There is an element of relief as markets feared another downgrade,” said Jens Houe Thomsen, an analyst at Silkeborg, Denmark-based Jyske Bank A/S. “We’re one month into the final quarter of the year and if they were to deliver another substantial downgrade it would have arrived by now.”
About 8.6 percent of Pandora shares are on loan, an indication of short-sellers’ interest, according to research firm Data Explorers.
Telenor ASA climbed 6.2 percent to 98.20 kroner as the largest phone company in the Nordic region raised its full-year sales and profitability outlook after third-quarter earnings increased.
Nyrstar declined 6.8 percent to 6.26 euros in Brussels. The zinc producer lowered its forecast for output from mines because of lower-than-expected deliveries from Talvivaara Mining Co.’s Finnish site, where it has an offtake agreement.
To contact the reporter on this story: Peter Levring in Copenhagen at Plevring1@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer in London at arummer@bloomberg.net
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