By Adria Cimino - Jan 2, 2012 7:39 PM GMT+0700
European (SXXP) stocks gained on their first trading day this year, following the Stoxx Europe 600 Index’s first annual loss since 2008, as a measure of German manufacturing beat estimates and a gauge of chemical makers rose. Asian shares retreated.
Siemens AG (SIE) increased 2.1 percent for the biggest contribution to the Stoxx 600’s advance (SXXP).
The Stoxx 600 rose 0.7 percent to 246.21 at 12:36 p.m. in London. The U.S. and U.K. markets are closed today for the New Year’s holiday. Futures on the Standard & Poor’s 500 Index didn’t trade, while the MSCI Asia Pacific excluding Japan Index slipped 0.3 percent.
“On the first day of the year, a lot of investors, having cleaned their portfolios, have liquidity to invest,” said Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, which oversees about $84 million. “Germany can be seen as a safe haven because it has stronger growth than other countries. People are investing in industries with a lot of visibility, such as utilities.”
A measure of German manufacturing climbed to 48.4 in December, beating the median economist estimate (PMITMGE) for a reading of 48.1. The purchasing managers’ index (PMITMGE) compiled by Markit Economics had a reading of 47.9 in November.
European (SXXP) stocks climbed in the last week of 2011 as reports from the U.S. showed the recovery in the world’s largest economy is gathering pace and as optimism grew that euro-area policy makers will contain the debt crisis. The second straight week of gains helped trim last year’s loss to 11 percent (SXXP).
The index entered a bear market (SXXP) in August and had its worst third quarter since 2002, dropping 17 percent (SXXP), as U.S. leaders wrangled over cutting the deficit and euro-area policy makers remained divided on their response to the debt crisis.
Euro-Area Debt
Some 157 billion euros ($203 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG. National leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Jan. 9 to work out the details.
In her New Year’s address, Merkel said she expects turbulence in 2012 as she does “everything” to save the euro and end the debt crisis. Greek Prime Minister Lucas Papademos said in his New Year’s message that the country faces a difficult year and must continue efforts to stay in the euro.
In the U.S., the S&P 500 (SPX) was virtually unchanged last year. The benchmark gauge lost 0.04 points to 1,257.6 in 2011, its smallest annual change since 1947.
National benchmark indexes advanced in 14 of the 15 western European markets that opened today. Germany’s DAX Index added 2.2 percent. France’s CAC 40 Index gained 1 percent.
U.S. Payrolls Report
A report this week will probably show that hiring in the U.S. accelerated in December for a second month, a sign that the country’s improving labor market will bolster consumer spending in early 2012, economists said. Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 62 economists in a Bloomberg News survey before the Labor Department release on Jan. 6.
Another report (NAPMPMI) this week may show manufacturing picked up in the U.S., economists said.
Siemens, Henkel Climb
Siemens, Europe’s largest engineering company (SIE), added 2.1 percent to 75.51 euros. A gauge of chemical makers (SXXP) increased 1.2 percent, with the preferred shares of Henkel AG, the maker of industrial adhesives and Persil washing powder, increasing 1.7 percent to 45.36 euros.
ThyssenKrupp, Germany’s biggest steelmaker (TKA), jumped 3.6 percent to 18.36 euros.
RWE AG (RWE), Germany’s second-largest utility (RWE), advanced 3 percent to 27.98 euros. The company is among stocks on Cheuvreux’s German selected list for 2012. Suedzucker AG (SZU) gained 0.7 percent to 24.83 euros. The sugar refiner also appeared on Cheuvreux’s list.
Sunways AG (SWW) surged 23 percent to 1.89 euros, its largest advance since September. China’s LDK Solar Co. said it intends to take over the company. Sunways said LDK will buy a 33 percent stake and has offered to purchase the remaining equity for 1.90 euro per share. Q-Cells SE rallied 5.2 percent to 54.5 euro cents.
Wacker Chemie AG (WCH), the second-biggest maker of solar-grade silicon, jumped 4.5 percent to 64.95 euros.
SolarWorld AG (SWV) climbed 1.4 percent to 3.30 euros as Chief Executive Officer Frank Asbeck told Euro am Sonntag that the company will meet its full-year target of more than 1 billion euros in sales. Asbeck described fourth-quarter sales as “pleasantly good.”
Automakers Rise
Carmakers rose 1.8 percent for the biggest gain among the 19 industry groups in the Stoxx 600 (SXXP). Daimler AG (DAI) increased 1.9 percent to 34.58 euros. The carmaker said that it has delivered more than two million Mercedes sport-utility vehicles since their launch. The company wants to produce a record 988,110 Mercedes-Benz brand vehicles in Germany in 2012, Automotive News Europe reported yesterday, citing internal company documents.
Veolia Environnement SA (VIE) added 2.7 percent to 8.70 euros. The company has drawn interest for its U.K. water business from bidders including Allianz SE and Canada’s Borealis pension fund, the Sunday Times reported, without citing anyone.
Enel SpA climbed 1.5 percent to 3.19 euros. Terna SpA jumped 4.6 percent to 2.72 euros. Mediobanca SpA said that Italy’s new regulatory framework for electricity transport and distribution tariffs is overall positive.
Nutreco, Icade, Storebrand
Nutreco NV (NUO) advanced 1.7 percent to 51.72 euros. The world’s biggest maker of fish feed had its shares upgraded to “selected list” (NUO) from “outperform” at Cheuvreux.
Icade SA slipped 1.9 percent to 59.65 euros. Groupama SA, the French insurer hurt by Greek sovereign-debt losses and declining stock holdings, said its board agreed to merge its stake in Silic SA with Caisse des Depots et Consignations’ Icade unit.
Storebrand ASA (STB) fell 3.6 percent to 29.97 kroner. Norwegian insurance companies received 6,000 claims after storm Dagmar swept over Norway during the Christmas holiday.
YIT Oyj (YTY1V) advanced 2.9 percent to 12.74 euros. The company won an order to make foundations and provide maintenance for 90 wind-power plants in Finland from TuuliWatti Oy.
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
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