By Sarah Jones - Dec 9, 2011 9:23 PM GMT+0700
European stocks climbed, trimming a weekly decline for the Stoxx Europe 600 Index, after a report said China’s central bank plans to set up $300 billion of funds to invest overseas.
Barclays Plc (BARC) led a rebound in banks after policy makers reached their latest agreement to tackle the debt crisis. Alcatel-Lucent SA increased 5.2 percent after analysts upgraded the company. K+S AG (SDF) fell after U.S. rival Potash Corp. planned production cuts on weaker demand.
The Stoxx 600 rose 0.5 percent to 238.86 at 2:21 p.m. in London, climbing for the first time in four days. The gauge has lost 0.8 percent this week as the European Central Bank damped speculation it will increase government-bond purchases and policy makers convened at the debt-crisis summit in Brussels.
“I am not convinced traders see much upside,” said Manoj Ladwa, a senior trader at ETX Capital in London. “Nothing has really changed with regards to Europe. They seem to be taking small baby steps to resolve the region’s issues.”
The Stoxx 600 jumped as much as 1.4 percent after Reuters reported China will create a new investment vehicle to improve returns on its foreign-exchange reserves. The vehicle will operate one fund targeting investment in the U.S. and another focused on Europe, Reuters reported, citing an unidentified person with knowledge of the matter.
Fiscal Union
German Chancellor Angela Merkel said the leaders of the 17 euro nations reached an accord to tighten budget controls and channel 200 billion euros ($267 billion) through the International Monetary Fund.
In an accord hailed by ECB President Mario Draghi, the leaders outlined a new fiscal agreement to prevent future debt run-ups, accelerated the start of a planned 500 billion-euro rescue fund and watered down bondholder loss-sharing provisions.
“We still have good intentions, but it’s going to take a while for everything to be put on to paper which means a long term with uncertainty in markets,” Carsten Brzeski, an economist at ING Group NV in Brussels, said in an interview on Bloomberg Television. “We still need the big bazooka and we didn’t get the bazooka.”
National benchmark indexes climbed in 14 of 18 western European markets. France’s CAC 40 rose 1.3 percent, the U.K.’s FTSE 100 advanced 0.2 percent and Germany’s DAX Index increased 0.9 percent.
Lenders Advance
Banks recovered from earlier losses. Barclays rallied 3.4 percent to 186.5 pence, gaining for the first time in four days. Italy’s Intesa Sanpaolo SpA (ISP) rose 4.7 percent to 1.24 euros and Deutsche Bank AG (DBK) increased 3.1 percent to 29.12 euros.
Alcatel jumped 4 percent to 1.23 euros after Sanford C. Bernstein & Co. raised its recommendation for France’s largest telecommunications equity supplier to “outperform” from “market perform” saying there is “significant” upside from a breakup of the company.
Bellway Plc (BWY) gained 2.6 percent to 747.5 pence after the U.K. homebuilder said completed sales will increase by about 5 percent in the six months through January. The company also reported a 14 percent increase in sales reservations from Aug. 1 to Nov. 30 compared with a year earlier. Average prices rose by almost 7 percent.
K+S, Europe’s largest potash producer, dropped 2.8 percent to 35.06 euros. Potash Corp., the world’s largest fertilizer producer said it plans an eight-week production shutdown at its Lanigan mine starting Jan. 8 and will close the Rocanville facility for six weeks beginning Dec. 25.
Separately, Morgan Stanley cut the 2012 earnings-per-share estimate for K+S by 36 percent, citing forecasts for lower potash demand.
African Barrick Gold Plc lost 3.2 percent to 503.5 pence after the largest producer of the precious metal in Tanzania said fourth-quarter output will miss forecasts because of power outages.
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 at arummer@bloomberg.net
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