Stocks in Europe Climb, U.S. Futures Rise; Syngenta Gains, Banks Decline

By Sarah Jones - Oct 14, 2011 4:49 PM GMT+0700

European stocks climbed, extending the Stoxx Europe 600 Index’s longest stretch of weekly gains in six months, as Group of 20 finance ministers meet in Paris to discuss the euro area’s debt crisis. U.S. index futures gained, while Asian shares retreated.

Syngenta AG (SYNN) led chemical makers higher, jumping 3.5 percent after reporting third-quarter sales that beat analysts’ estimates. MAN SE rallied more than 2 percent after U.S. haulier J.B. Hunt Transport Services Inc. posted earnings that topped forecasts. Banks limited gains in Europe after Fitch Ratings downgraded UBS AG (UBSN) and put more than a dozen other lenders on watch negative as part of a global review.

The Stoxx 600 rose 0.9 percent to 238.7 at 10:47 a.m. in London, extending its weekly advance to 2.9 percent. Standard & Poor’s 500 Index futures expiring in December gained 0.9 percent, while the MSCI Asia Pacific Index fell 0.7 percent.

“There is a better feel to the market,” said Paul Coffin, a fund manager at Fieldings Investment Management Ltd. in London. “Stock valuations are quite low and bonds are looking a tad expensive. We’ve seen a good rally, but if Europe doesn’t show a big enough gun, it could turn out to be a case of better to travel than arrive.”

G-20 finance ministers and central bankers meet in Paris today and tomorrow, while European leaders will meet at a debt- crisis summit in Brussels on Oct. 23.

Europe’s Stoxx 600 is headed for a third week of gains amid optimism euro-area policy makers will contain the region’s debt crisis. From Oct. 4 through Oct. 12 the measure rallied 10 percent for its biggest advance over six days since January 2009. The benchmark gauge has still fallen 19 percent from its high on Feb. 17.

Spain Credit Downgrade

Stocks climbed today even after Standard & Poor’s downgraded Spain’s credit rating for the third time in three years as slowing growth and rising defaults threaten banks.

The rating company reduced Spain’s ranking by one level to AA-, S&P’s fourth-highest investment grade, with the outlook remaining negative, in a statement late yesterday.

Elsewhere, nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the euro area’s debt crisis, G-20 and IMF officials said.

Policy makers have discussed expanding the IMF’s firepower as part of a global G-20 agreement next month in Cannes, France, according to three officials, who declined to be named because the discussions are not public. The talks are in preliminary stages as potential contributors wait to see what measures the Europeans take to end the debt turmoil at their Oct. 23 summit, the officials said.

Syngenta, Wacker Chemie

Syngenta paced advancing shares, jumping 2.6 percent to 271.60 francs after the world’s largest maker of agricultural chemicals reported third-quarter sales of $2.7 billion. That beat the average of six analysts’ estimates of $2.5 billion. The company also said momentum in sales volume continued into the fourth quarter with no drop-off in orders.

Wacker Chemie AG rallied 8.3 percent to 79.72 euros. Clariant AG, which said it raised 365 million euros ($503 million) by issuing three-year certificates, climbed 3.1 percent to 9.70 euros. Yara International ASA increased 2.5 percent to 249.20 kroner.

MAN, the German truckmaker that Volkswagen AG is seeking to control, gained 2.1 percent to 59.84 euros and Sweden’s Scania AB rose 1.4 percent to 102.90 kronor. J.B. Hunt reported third- quarter earnings of 57 cents a share, beating the average analyst estimate of 56 cents.

Lenders on Watch

Banks limited gains on the Stoxx 600 after Fitch late yesterday cut its long-term issuer default rating for UBS, Switzerland’s largest lender, to A from A+.

The rating company downgraded Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc during European trading yesterday.

Fitch also placed viability ratings, and in some cases credit grades, on negative watch for seven global banks, including Goldman Sachs Group Inc. and Morgan Stanley, because of new regulations and economic developments. It placed European lenders including Credit Agricole SA (ACA), Deutsche Bank AG (DBK), Credit Suisse AG, BNP Paribas (BNP) SA, Societe Generale (GLE) SA and Barclays Plc (BARC) on watch.

UBS slipped 0.5 percent to 10.87 francs. BNP Paribas slid 2.6 percent to 32.49 euros, while Societe Generale dropped 2.6 percent to 21.04 euros.

Sulzer, Finmeccanica

Sulzer AG plunged 6.1 percent to 96.90 francs after the Swiss maker of pumps predicted a slowdown in order growth for the full year as customers hesitate to invest amid rising economic uncertainty.

Finmeccanica SpA (FNC) lost 2.2 percent to 5.28 euros after HSBC Holdings Plc lowered its recommendation for Italy’s biggest military contractor to “underweight” from “neutral” and cited the company as a “risky investment.”

BowLeven Plc (BLVN) soared 41 percent to 106 pence after the U.K.- listed oil explorer focused on Africa said it discovered oil from an exploration well. The Sapele-3 well in the Douala Basin at the Etinde permit encountered 11 meters of net pay and the reservoir appears to be of “good quality,” the company said.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer in London at arummer@bloomberg.net;