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European Stocks Rise After Greek Austerity Approval; C&W Rallies

Tuesday, 14 February 2012 | 00:00
European (SXXP) stocks advanced the most in more than a week after Greek lawmakers approved austerity measures needed to get the financial rescue the nation seeks.
Mining shares led the rally. Cable & Wireless Worldwide Plc surged 45 percent after Vodafone Group Plc (VOD) said it’s considering an offer for the company. Commerzbank AG (CBK) and Lloyds Banking Group Plc (LLOY) each added 1.6 percent.
The Stoxx Europe 600 Index gained 0.7 percent to 263.17 at the close. The benchmark measure made the “Golden Cross (SXXP),” with its 50-day moving average rising above the 200-day average for the first time since Sept. 3, 2010, a signal for further increases according to some technical analysts.
“The market is relieved that things moved forward in Greece,” said Peter Braendle, who helps manage $60 billion at Swisscanto Asset Management AG in Zurich. “It shows that political solutions can be found in Europe, albeit in the last minute.”
The Stoxx 600 has advanced 7.6 percent this year amid optimism that the euro area will contain the debt crisis and as most U.S. economic data beat forecasts.
National benchmark indexes climbed in 16 of the 18 western- European (SXXP) markets today. The U.K.’s FTSE 100 Index added 0.9 percent. France’s CAC 40 Index gained 0.3 percent and Germany’s DAX Index rose 0.7 percent.
Greek Approval
Greek Prime Minister Lucas Papademos won parliamentary approval for the spending cuts after rioters protesting the measures battled police and set fire to buildings in downtown Athens. A total of 199 lawmakers voted for and 74 against the austerity plans.
The bill’s passage puts the spotlight on a meeting of euro- area finance ministers on Feb. 15 that must decide whether to approve a second aid package. Germany and the European Commission welcomed Greek approval of the package, suggesting euro-area finance chiefs will pull Greece back from the brink when they meet.
The European Financial Stability Facility, the region’s bailout fund, will supply a “significant” portion of the aid needed for Greece’s rescue, WirtschaftsWoche reported, citing EFSF Deputy Chief Executive Officer Christophe Frankel.
Italy’s borrowing costs fell at a debt auction today. The Rome-based Treasury sold 8.5 billion euros of 365-day bills and 3.5 billion euros of 127-day bills at rates lower than in the previous sales.
Germany sold 3.01 billion euros of six-month bills at an average yield of 0.0761 percent, up from a negative yield at a sale on Jan. 9.
Commodity Shares
A gauge of mining shares rallied 1.5 percent for the best performance on the Stoxx 600 as copper rebounded from the biggest drop in a month.
Rio Tinto Group and BHP Billiton Ltd. (BHP), the world’s biggest mining companies, added 2 percent to 3,845.5 pence and 1.2 percent to 2,082.5 pence, respectively. Anglo American Plc (AAL) added 2.6 percent to 2,817 pence.
Cable & Wireless Worldwide surged 45 percent to 28.54 pence after Vodafone, the world’s largest mobile-phone company, said it is in an early stage of evaluating a potential bid for the company. An offer, if made, may be in cash, Vodafone said.
Vodafone may offer 700 million pounds ($1.1 billion) for C&W Worldwide, Sunday Times of London reported yesterday, without saying where it got the information.
Bank Shares
National Bank of Greece jumped 9 percent to 2.92 euros, extending its gains this year to 80 percent. Commerzbank, Germany’s second-largest lender, climbed 1.6 percent to 2.09 euros. UBS AG (UBSN), Switzerland’s biggest bank, rose 1.6 percent to 12.93 Swiss francs. Lloyds added 2.3 percent to 35.30 pence.
Banks in France fell after the government ended a ban on short-selling in the stocks 10 banks and insurance companies, the country’s markets regulator said today. Credit Agricole SA (ACA) fell 3.6 percent to 5.13 euros and BNP Paribas (BNP) SA dropped 2.1 percent to 34.33 euros. Societe Generale (GLE) SA slid 2.2 percent to 22.74 euros.
Areva SA, the French maker of nuclear reactors and fuel, advanced 4.1 percent to 19.15 euros. Areva will supply Electricite de France SA with as much as 20,000 metric tons of uranium over the period 2014 through 2030, the companies said. EDF may also help finance a new mining project with Areva, according to the statement.
Nexans, Outotec
Nexans SA (NEX), the world’s second-largest maker of cables and wires, rose 0.8 percent to 51.44 euros after it said it has agreed to buy AmerCable Holdings Inc. for $275 million. The purchase will be funded from cash reserves, Nexans said.
Outotec Oyj, the Finnish supplier of technology and services to mining companies, added 2.4 percent to 42.49 euros after Carnegie ASA raised the stock to “buy” from “hold.”
Alcatel-Lucent, France’s biggest telecommunications- equipment supplier, dropped 1.9 percent to 1.65 euros after Andy Perkins, an analyst at Societe Generale SA, cut the company’s shares to “sell” from “hold.”
Royal Boskalis Westminster NV, the world’s largest dredging company, slumped 6.2 percent to 28.38 euros. Boskalis said it didn’t get the Wheatstone project dredging order in Australia, a spokesman said.
Source: Bloomberg
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