European Stocks Advance on German Confidence, Spanish Debt Sale; BMW Gains

By Julie Cruz - Dec 13, 2011 8:11 PM GMT+0700

European stocks climbed, rebounding from their biggest slide in three weeks, as Spain sold more securities than it had planned at a debt auction and a report showed that investor confidence in Germany improved. U.S. index futures rose, while Asian shares fell.

Lagardere SCA (MMB) climbed 3.2 percent after Deutsche Bank AG recommended the shares of France’s largest publisher. Bayerische Motoren Werke AG (BMW) and Volkswagen AG (VOW) led gains in carmakers, advancing more than 1.5 percent. Kabel Deutschland AG surged 5.2 percent as Liberty Global Inc. said it has held “constructive dialog” with Germany’s Cartel Office over its proposed purchase of Kabel Baden-Wuerttemberg GmbH.

The Stoxx Europe 600 Index rose 0.7 percent to 237.65 at 1:08 p.m. in London, erasing an earlier drop of 0.4 percent. The gauge has still declined 14 percent this year amid concern the euro area’s sovereign-debt debt crisis will derail the global economic recovery. Standard & Poor’s 500 Index futures expiring in March climbed 0.7 percent, while the MSCI Asia Pacific Index fell 1 percent as Chinese housing sales slumped.

“Demand is obviously not declining as strongly as observers might have thought after the significant drops of orders in the third quarter,” said Ulrike Rondorf, an economist at Commerzbank AG (CBK) in Frankfurt. “This eases fears that the German economy is hit by an uncertainty shock similar to 2008. However, we do not believe that the ZEW will swing onto an upward trend soon.”

German Investor Confidence

The ZEW Center for European Economic Research said that its index of German investor and analyst expectations, which aims to predict developments six months in advance, posted a reading of minus 53.8 in December. That was better than the median estimate of economists in a Bloomberg News survey.

Spain sold 4.94 billion euros ($6.5 billion) of 12- and 18- month bills, the Bank of Spain said, compared with the maximum target of 4.25 billion euros the Treasury set for the sale.

A report at 8:30 a.m. in Washington today may show that U.S. retail sales climbed in November as Americans bought more new cars and began their holiday shopping. The 0.6 percent gain in sales would follow a 0.5 percent increase in October, according to the median forecast of 83 economists surveyed by Bloomberg News.

Federal Reserve Chairman Ben S. Bernanke and his policy- making colleagues meet today to discuss the outlook for an economy that has strengthened since their November gathering, lowering the jobless rate to 8.6 percent from 9 percent. The Federal Open Market Committee will release a statement at about 2:15 p.m. Washington time.

Dec. 9 Accord

Moody’s Investors Service said yesterday that it will review the ratings of European Union nations because Dec. 9’s summit accord produced few new measures to tackle the debt crisis. The region’s leaders agreed at the meeting in Brussels to channel 200 billion euros through the International Monetary Fund to increase the resources available for future bailouts.

Fitch Ratings, without taking any action, said after the close of European trading yesterday that the summit did little to ease pressure on Europe’s sovereign-bond ratings.

“We’re in a situation that needs more time to be solved,” said Philipp Musil, who helps manage about $11 billion at Semper Constantia Privatbank AG in Vienna. “Politicians have to set up the right framework and the right rules. We need big decisions.”

Lagardere jumped 3.2 percent to 18.87 euros in Paris after Deutsche Bank upgraded the publisher to “buy” from “hold.”

BMW, Volkswagen Advance

BMW rose 1.7 percent to 53.43 euros, while the preferred shares of Volkswagen advanced 1.6 percent to 121.95 euros. Carmakers were among the best performers in the Stoxx 600 today, climbing 1.2 percent.

Kabel Deutschland increased 5.2 percent to 40.34 euros. Earlier, Manager Magazin reported that the German Cartel Office had allowed Liberty Global to buy Kabel Baden-Wuerttemberg. The Cartel Office subsequently denied it had approved the deal.

K+S AG added 3.4 percent to 34.90 euros as Vale SA, the world’s second-biggest mining company by market value, paid 2.08 billion reais ($1.1 billion) to increase its stake in fertilizer producer Vale Fertilizantes SA amid strong growth in agriculture.

Whitbread Plc (WTB) slid 4.4 percent to 1,507 pence for its biggest drop since September. The owner of Premier Inn and Costa Coffee shops reported a slowdown in revenue growth as the U.K. hotel market weakened.

Commerzbank AG slipped 1.6 percent to 1.20 euros after Germany’s Finance Ministry denied a Reuters report that it’s in talks with the country’s second-largest lender to offer state assistance, saying that communication between the government and the bank doesn’t go beyond the “exchange of information.”

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

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