European Stocks Climb Before Greek Decision

By Namitha Jagadeesh - Feb 20, 2012 5:37 PM GMT+0700

European (SXXP) stocks rose, extending a six-month high, before euro-area finance ministers meet to discuss a Greek bailout and as China cut banks’ reserve requirements. U.S. index futures and Asian shares also advanced.

TNT Express NV surged 54 percent after rejecting a takeover offer from United Parcel Service Inc. PostNL NV, a shareholder in TNT, jumped 46 percent. BP Plc (BP/) advanced after an Oppenheimer & Co. analyst said the company may reach a settlement this week on the Gulf of Mexico oil spill.

The Stoxx Europe 600 Index (SXXP) climbed 0.9 percent to 268.22 at 10:35 a.m. in London. The benchmark gauge has rallied 9.7 percent this year amid optimism that the euro area will contain its debt crisis and as the U.S. economy continued its recovery. Futures on the Standard & Poor’s 500 Index added 0.5 percent today, while the MSCI Asia Pacific Index advanced 0.8 percent. U.S. markets are closed today for the Presidents’ Day holiday.

“It is in most countries’ interest to preserve the European (SXXP) Union and the euro,” said Peter Garnry, an equity strategist at Saxo Bank AS, in an interview on Bloomberg Television. “We think there will be a deal, the Chinese will come into the game and play a more stabilizing role for Europe because it is one of their largest export markets.”

Euro-area finance ministers meet in Brussels today to prevent the region’s first sovereign default through a bailout for Greece. They will join Greek Prime Minister Lucas Papademos, who arrived on the eve of the gathering. Their talks will seek to reconcile demands made on Greek leaders, a debt swap among private creditors, the role of the European Central Bank and concerns the measures won’t be enough to contain the crisis.

China Eases Policy

China cut the amount of cash that banks must set aside as reserves for the second time in three months to spur lending. Reserve requirements will fall by 50 basis points effective Feb. 24, the People’s Bank of China said.

TNT Express surged 54 percent to 9.77 euros after Europe’s second-largest package-delivery company rejected a $6.43 billion takeover offer from UPS. PostNL, which owns almost 30 percent of TNT according to data compiled by Bloomberg, jumped 46 percent to 4.83 euros.

The “highly conditional” bid of 9 euros a share, 42 percent more than the Feb. 17 closing price in Amsterdam, was turned down by TNT’s supervisory and executive boards. UPS said it continues talks.

Oil, Mining Stocks Gain

A gauge of European oil and gas companies rose 1.2 percent as oil rose to a nine-month high in New York after Iran said it halted some crude exports and investors bet that fuel demand will increase.

BP added 2 percent to 498.8 pence. The operator of the Macondo well that caused the U.S.’s worst oil spill may reach a deal this week after a partner agreed on fines, said Fadel Gheit, an analyst at Oppenheimer in New York.

Petroleum Geo-Services ASA (PGS) jumped 7.7 percent to 86.45 kroner, its highest since Aug. 2, after fourth-quarter earnings before interest, taxes, depreciation and amortization beat analysts’ estimates.

An index of mining stocks advanced 1.8 percent for the best performance on the Stoxx 600 as metals rallied. BHP Billiton Ltd. climbed 2.6 percent to 2,074.5 pence, while Rio Tinto Group added 2.5 percent to 3,712.5 pence.

Earnings Scorecard

Of the 173 Stoxx 600 companies that have reported quarterly earnings since Jan. 9, as many as 76 exceeded analyst estimates, compared with 86 that missed projections, according to data compiled by Bloomberg.

Carlsberg AS, the owner of Russia’s biggest brewer, declined 1.6 percent to 435.80 kroner after the company posted a 4.2 percent drop in 2011 profit on weaker sales in Russia and higher input costs.

Ageas, the Belgian insurer, slipped 0.8 percent to 1.70 euros after reporting a fourth-quarter net loss of 44.5 million euros.

Veolia Environnement SA (VIE) retreated 4 percent to 9.20 euros after Les Echos reported the company’s directors are seeking to replace Chief Executive Officer Antoine Frerot.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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