By Adria Cimino - Oct 17, 2011 7:40 PM GMT+0700
European stocks fluctuated as a German government spokesman said that euro-area leaders will not provide a quick ending to the debt crisis at their next meeting. Asian stocks rose, while U.S. futures were little changed.
National Bank of Greece SA (ETE), the country’s biggest lender, led bank shares lower. G4S Plc slumped 21 percent after agreeing to acquire ISS Holdings A/S. BP Plc (BP/) surged 4.3 percent after saying that Anadarko Petroleum Corp. will pay $4 billion to settle all claims for last year’s Gulf of Mexico oil spill. Royal Philips Electronics NV gained 1.6 percent after announcing a plan to cut costs.
The Stoxx Europe 600 Index added 0.2 percent to 238.88 at 1:37 p.m. in London, paring an earlier gain of as much as 1.5 percent after Germany’s government said that the European Union’s Oct. 23 summit will not provide a complete fix to the euro area’s sovereign debt crisis. The benchmark measure swung between gains and losses at least eight times today.
“Markets are off their earlier highs on the back of wary comments from Germany suggesting that the upcoming EU summit won’t present a final solution for euro-zone debt crisis,” said Stephane Ekolo, chief European strategist at Market Securities in London. “These comments remind investors how difficult it is to find a solution regarding the euro-zone woes. The problems are still out there and the solution isn’t really coming.”
Futures on the Standard & Poor’s 500 Index expiring in December slipped 0.1 percent, while the MSCI Asia Pacific Index increased 1.9 percent.
Germany Damps Optimism
Stocks pared earlier gains after Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, told reporters in Berlin that European leaders won’t fulfill “dreams” of a quick end to the debt crisis at the Oct. 23 summit.
The Stoxx 600 advanced 2.8 percent last week. The gauge has still retreated 18 percent from this year’s high on Feb. 17 as concern mounted that Greece will default, pushing borrowing costs higher for other indebted euro-area countries. The gauge traded at 9 times its companies’ estimated earnings on Sept. 22, the cheapest since March 2009, according to data compiled by Bloomberg.
G-20 finance ministers and central bank governors concluded weekend talks in Paris endorsing parts of the emerging plan to avoid a Greek default, bolster banks and curb contagion.
Backstop for Banks
The euro area’s plan, which has yet to be made public, includes writing down Greek bonds by as much as 50 percent, establishing a backstop for banks and magnifying the strength of the 440 billion-euro ($606 billion) temporary rescue fund known as the European Financial Stability Facility, people familiar with the matter said last week.
Hurdles to overcome for the accord include resistance from bankers to a deeper restructuring of Greek debt as well as disagreements between Europe’s capitals over just how to multiply the firepower of their bailout fund and recapitalize financial institutions.
Greece’s ASE Index plunged 3.4 percent for the biggest decline among national indexes. National Bank of Greece sank 7.1 percent to 1.69 euros. Piraeus Bank SA (TPEIR) retreated 9.8 percent to 25.8 euro cents. EFG Eurobank Ergasias tumbled 8.6 percent to 66.7 euro cents.
A Federal Reserve report due at 9:15 a.m. New York time will show that industrial production, or output from factories, mines and utilities, expanded for a fifth straight month in September, according to the median estimate in a survey of economists.
A separate report showed that manufacturing in the New York area contracted in October more than economists had forecast. The Empire State Index covering New York, northern New Jersey, and southern Connecticut gave a reading of minus 8.5, a larger drop than the average estimate of minus 4 in a Bloomberg News survey of economists.
G4S Plc (GFS) slumped 21 percent to 223.5 pence for the largest drop on the Stoxx 600. The world’s largest security provider agreed to acquire ISS Holdings A/S for about 5.2 billion pounds ($8.2 billion), of which 3.7 billion pounds is assumed debt, to add cleaning and other facilities-management services and accelerate expansion in emerging markets.
BP Plc soared 4.3 percent to 434.3 pence. BP, Europe’s second-largest oil company, said Anadarko will pay to settle all claims over the world’s largest accidental oil spill.
Anadarko, which had a 25 percent stake in the Gulf of Mexico well, will no longer pursue allegations of gross negligence against BP, the London-based company said. BP’s shares made the biggest contribution to the Stoxx 600’s advance.
Philips, Aviva
Philips rose 1.6 percent to 15.04 euros after the world’s biggest maker of light bulbs said it plans to cut 4,500 jobs globally, including 1,400 in the Netherlands, as part of a plan to lower costs by 800 million euros. The company reported third- quarter net income of 74 million euros, exceeding the average analyst estimate of 48.7 million euros.
Aviva Plc (AV/), the U.K.’s second-biggest insurer by market value, climbed 1.5 percent to 344 pence after the stock was raised to “buy” from “neutral” at UBS AG.
SGL Carbon SE (SGL) soared 10 percent to 41.83 euros, its highest price since August 2008. Bayerische Motoren Werke AG (BMW) plans to buy a stake in the German maker of carbon and graphite materials, Spiegel said, citing an unidentified manager at the automaker.
Saint-Gobain Climbs
Cie. de Saint-Gobain advanced 2.6 percent to 34.43 euros. The stock was upgraded to “outperform” from “market perform” at Sanford C. Bernstein & Co., which said the company’s presence in France and other western-European markets and flat or receding energy costs will help it “progress” earnings.
Air France-KLM (AF) Group, Europe’s second-largest airline by sales, surged 4.1 percent to 5.75 euros. The company’s board will meet today to vote on ousting Chief Executive Officer Pierre-Henri Gourgeon and replacing him with Alexandre de Juniac, a former chief of staff to Christine Lagarde, according to two people with knowledge of the proposals.
L’Oreal SA (OR), the world’s biggest cosmetics company, advanced 1.7 percent to 79.86 euros. A French judged ruled that L’Oreal heiress and France’s third-richest person, Liliane Bettencourt, was mentally unfit to manage her own affairs. The court appointed Bettencourt’s daughter to manage her assets.
Tenaris SA (TEN) increased 2.6 percent to 10.87 euros. The world’s largest maker of seamless steel pipes was raised to “outperform” from “neutral” at Mediobanca SpA.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net.
Posts
No comments:
Post a Comment