By Peter Levring - Jan 13, 2012 4:37 PM GMT+0700
European (SXXP) stocks climbed, with the benchmark Stoxx Europe 600 Index headed for its fourth weekly advance, as Italy prepares to sell more debt. U.S. index futures were little changed, while Asian shares rose.
Commerzbank jumped 6.1 percent after German newspaper Handelsblatt reported that the lender will raise its capital levels without seeking government aid. GN Store Nord A/S (GN), a Danish maker of hearing aids and headsets, rallied 13 percent after one of its units won a settlement from Telekomunikacja Polska SA (TPS) over a dispute in Poland. Invensys Plc (ISYS) slumped the most in almost nine years after revealing 60 million pounds ($92 million) in additional costs.
The Stoxx 600 rose 0.3 percent to 250.28 at 9:35 a.m. in London. The gauge is headed for a weekly gain of 1.1 percent as the Federal Reserve confirmed the U.S. economy continues to grow and borrowing costs fell in the euro area. Futures on the Standard & Poor’s 500 Index expiring in March slipped less than 0.1 percent. The MSCI Asia Pacific Index added 0.9 percent.
“Investors are trading on the positive sentiment from the past weeks,” said Henrik Henriksen, the chief investment strategist at PFA Pension A/S, which has assets of $53 billion. “Recent data was not as bad as feared in Europe and has been better than expected in the U.S. and Asia.”
European (SXXP) stocks fell in the past two days as the German economy shrank in the final quarter of 2011 and data on U.S. retail sales and initial jobless claims missed economists’ forecasts.
Italian Debt
Italy, which raised 12 billion euros selling Treasury bills yesterday, seeks to sell 4.75 billion euros of bonds today. Spain and Germany this week received more bids than the amounts they targeted in their debt sales.
In the U.S., a report may show consumer sentiment reached a seven-month high. Thomson Reuters-University of Michigan preliminary index of consumer sentiment in January increased to 71.5 from 69.9 at the end of December, according to the median forecast in the Bloomberg survey before the report at 9:55 a.m. New York time. The measure may have been boosted by a pickup in job and wage growth at the end of 2011.
European Central Bank President Mario Draghi said in Frankfurt yesterday his strategy for battling Europe’s debt crisis is starting to work and that there are “tentative signs” of economic stabilization in the euro area.
Bank Stress Tests
The European Banking Authority will this year postpone the annual stress test for banks usually published in July, Handelsblatt reported, citing a spokeswoman for the EBA.
The test will be delayed to allow time for banks to get fresh capital to fill gaps documented by the last stress test in December, the newspaper said. The test may be postponed to the autumn or not happen at all this year, Handelsblatt said.
Commerzbank (CBK), Germany’s second-biggest lender, rose 6.1 percent to 1.46 euros to pace gains in European banks. The bank plans to raise its capital level by mid-year without seeking direct or indirect aid from the German state, its biggest shareholder, Handelsblatt reported, citing unidentified people close to the government.
Deutsche Bank AG (DBK), the biggest German lender, climbed 3.3 percent to 29.46 euros.
UniCredit SA and BNP Paribas (BNP) SA, the biggest lenders in Italy and France, rose 3.5 percent to 3.01 euros and 3.8 percent to to 32.20 euros, respectively.
GN Store Nord jumped 13 percent to 58.25 kroner after saying its DPTG unit and TPSA have reached a 550 million-euro agreement to settle a dispute on traffic volumes carried over a fiber optical telecommunications system in Poland. GN Store Nord said its entitled to receive 75 percent of the amount.
Invensys Plunges
Invensys Plc plummeted 23 percent to 175.9 pence, the biggest fall since March 2003. The British maker of washing- machine controls and factory gear revealed 60 million pounds in additional costs to fulfill contracts.
Full-year earnings will be “significantly” below last year as a result of the expenses, the London-based company said today.
Air France-KLM (AF) Group declined 2.3 percent to 4.39 euros. Europe’s biggest airline said it will freeze pay and hiring to cut costs by 1 billion euros, while beginning productivity talks with unions aimed at delivering a similar saving it says is needed to secure the long-term future.
To contact the reporters 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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