European Stocks Rise on China Pledge of Help; BNP, Heineken Gain
Thursday, 16 February 2012 | 00:00
European stocks climbed as China pledged to help resolve the region’s debt crisis and companies from BNP Paribas SA (BNP) to Heineken (HEIA) NV reported earnings that beat analysts’ estimates.
BNP Paribas, France’s largest bank, and Heineken, the world’s third-biggest brewer, rose more than 3 percent. Clariant (CLN) AG advanced 5.5 percent after earnings exceeded projections and the chemical maker said it may sell its textile and paper units.
The Stoxx Europe 600 Index added 0.7 percent to 264.33 at 4:34 p.m. in London, paring an earlier gain of 1 percent amid speculation a Greek aid package could be delayed until after April elections. The gauge has rallied 8.1 percent this year as U.S. economic data improved and optimism grew that the euro area will contain its sovereign-debt crisis.
“China has pledged to contribute to the bailout fund, which not only could increase the firepower available but might also persuade other countries like Japan, Russia, oil-rich states and possibly even the U.S. to actively take part in combating the crisis,” said Markus Huber, head of German sales trading at ETX Capital in London.
China pledged to invest in Europe’s bailout funds and sustain its holdings of euro assets. The commitment offers an incentive to European finance ministers, who are increasing pressure on Greece to deliver budget cuts in exchange for a second bailout.
“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan said in a speech in Beijing today. “We would participate in resolving the euro debt crisis,” he said, echoing comments by Premier Wen Jiabao yesterday.
National benchmark indexes gained in 12 of the 18 western European markets today. France’s CAC 40 added 0.5 percent and Germany’s DAX rose 0.6 percent. The U.K.’s FTSE 100 Index was little changed.
Euro-area finance ministers postponed a decision slated for tonight on Greek aid totaling 130 billion euros ($171 billion) until at least Feb. 20 and possibly until after a full-time government emerges from the nation’s elections later this year.
Antonis Samaras, the leader of Greece’s second-biggest political party, said in a letter he and his party New Democracy were committed to the implementation of terms and conditions for a second financing package for the country.
‘Playing With Fire’
Stocks pared earlier gains as Reuters reported that policy makers are examining delays to a second bailout program for Greece. Greek Finance Minister Evangelos Venizelos said that Europe’s wealthier countries are “playing with fire” by toying with the idea of expelling it from the euro area.
Europe’s economy shrank less than economists forecast in the fourth quarter as a better-than-predicted performance in Germany and France helped mitigate the region’s first contraction since 2009. Gross domestic product in the 17-nation euro area fell 0.3 percent from the prior three months, the first drop since the second quarter of 2009, the European Union’s statistics office said today.
BNP Paribas rallied 4 percent to 34.84 euros as fourth- quarter net income declined to 765 million euros from 1.55 billion euros a year earlier. That beat the 587 million-euro average estimate of 10 analysts surveyed by Bloomberg.
Bank shares were the top gainers in the Stoxx 600, adding 1.2 percent as a group. Societe Generale (GLE) SA rose 2.1 percent to 22.37 euros after three days of losses, while HSBC Holdings Plc increased 2.4 percent to 574.9 pence. UBS AG (UBSN) advanced 0.5 percent to 12.97 Swiss francs. Banca Monte Dei Paschi di Siena SpA (BMPS) rallied 10 percent to 33.6 euro cents and UniCredit SpA (UCG) increased 2.1 percent to 4.16 euros. Royal Bank of Scotland Group Plc (RBS) added 1.4 percent to 27.01 pence.
Heineken increased 3.9 percent to 38 euros after the brewer reported annual profit that beat estimates and unveiled new cost-saving targets.
Clariant gained 5.5 percent to 13.04 francs after saying it may sell or find other strategic options for business units generating 1 billion francs ($1.09 billion) in revenue as it moves away from commodity products. Finding the right option for the textile-chemical, paper specialties and emulsions units is a mid- to long-term goal, the Muttenz, Switzerland-based company said today.
Danone (BN) advanced 1.9 percent to 49.91 euros. The world’s biggest yogurt maker reported a 4.5 percent gain in 2011 earnings, helped by growth in infant nutrition and bottled water products.
TUI AG (TUI1), the owner of Europe’s largest travel company, rose 3.7 percent to 6.43 euros after saying it will sell a stake in Hapag-Lloyd and may dispose of its remaining holding in the shipper in an initial public offering.
ING Groep NV (INGA) added 2.3 percent to 6.72 euros. Capital One Financial Corp. (COF)’s planned purchase of ING’s U.S. online bank won approval from the Fed, clearing the way for the credit-card lender to add about $80 billion in deposits.
Puma SE rose 3.3 percent to 247.8 euros after Europe’s second-largest sporting goods maker reported profit that beat analysts’ estimates and its own projection and forecast growth in sales and earnings in each of the next two years. Rival Adidas AG (ADS) gained 2.5 percent to 59.24 euros.
TomTom NV (TOM2), Europe’s biggest maker of portable navigation devices, soared 7.1 percent to 4.2 euros after saying it plans to introduce the HD Traffic service to China.
Swisscom AG (SCMN), Switzerland’s biggest phone company, fell 2.1 percent to 360 francs after predicting lower revenue in 2012 and posting its first quarterly loss in almost a decade on a writedown of Italian fixed-line unit Fastweb SpA.
National Bank of Greece SA (ETE), the country’s largest lender, sank 11 percent to 2.54 euros, dropping for a second day. Alpha Bank SA and EFG Eurobank Ergasias dropped 14 percent to 1.45 euros and 16 percent to 0.98 euros respectively.