European Stocks Advance as Air Liquide, Rio Tinto, BA Climb
http://www.fxfxfx.com 2010-02-16 12:45:50Rio Tinto Group led commodity producers higher as Credit Suisse Group AG and BofA-Merrill Lynch Global Research recommended the stock. Air Liquide, the world’s biggest producer of industrial gases, gained 1.3 percent. British Airways Plc and Iberia Lineas Aereas de Espana SA increased more than 2.5 percent after their plan for a deeper alliance with AMR Corp.’s American Airlines won approval from U.S. antitrust regulators.
The Stoxx 600 increased 0.4 percent to 241.92. The gauge rose last week for the first time in a month as concern eased that Greece, Spain and Portugal will struggle to curb their deficits and earnings at Swatch Group AG and Xstrata Plc beat estimates. The measure has still fallen 7.1 percent from this year’s high on Jan. 19.
“Investors will focus on the improving fundamental picture as the turmoil from fiscal concerns subsides,” Ian Scott, the global equity strategist at Nomura Holdings Inc. wrote in a report today. “Investors are turning their focus on, and are willing to pay for, dependable top-line growth.”
Fifty-four percent of companies in the Stoxx 600 that have reported earnings since Jan. 11 have beaten analysts’ forecasts for net income, according to Bloomberg data. More than 350 companies in the Standard & Poor’s 500 Index in the U.S. have posted quarterly results in the same period, and about 72 percent have topped profit estimates, the data show.
Benchmark Indexes
National benchmark indexes advanced in 11 of the 17 western European markets that were open today. The U.K.’s FTSE 100 rose 0.5 percent as VT Group Plc rallied. France’s CAC 40 gained 0.3 percent and Germany’s DAX increased 0.2 percent. The Greek market was closed for a holiday.
The U.S. equity market is shut for Presidents’ Day, while markets in China, Taiwan, Hong Kong, Singapore and Malaysia were closed for the Lunar New Year holiday.
Air Liquide advanced 1.3 percent to 79.88 euros after reporting 2009 net income of 1.23 billion euros ($1.7 billion), compared with an average analyst estimate of 1.18 billion euros. The company exceeded its target for cost cuts, leading to a wider profit margin even as sales fell.
Basic-resource shares posted the biggest gain among all 19 industry groups in the Stoxx 600, rising 1.3 percent.
Rio Tinto Rises
Rio Tinto, the world’s third-largest mining company, climbed 2.2 percent to 3,275 pence as Credit Suisse upgraded the shares to “outperform” from “neutral,” citing the strong outlook for iron ore. BofA Merrill Lynch added the company to its “Europe 1 List” of preferred shares.
Copper advanced in London as Japan’s economy grew more than forecast in the fourth quarter. Goldman Sachs Group Inc. maintained its forecast for 11.4 percent growth this year in China, the world’s largest consumer of the metal, even after the central bank raised reserve requirements for lenders last week. That compares with an 8.7 percent expansion in 2009.
British Airways, Europe’s third-biggest carrier, increased 2.6 percent to 200.6 pence and Iberia, Spain’s largest, rose 3.2 percent to 2.15 euros. The companies may jointly price, market and schedule international flights with American Airlines, the second-largest U.S. carrier, in their Oneworld alliance without fear of antitrust prosecution, the U.S. Transportation Department said on Feb. 13.
VT Group, Babcock
VT Group jumped 15 percent to 584 pence, the most since at least 1991. Babcock International Group Plc said it made an approach for the defense and civil support-services company, which was rejected by VT. Babcock shares slid 8.8 percent to 505 pence, the biggest decline in the Stoxx 600.
Renault SA gained 2.4 percent to 30.25 euros after Morgan Stanley upgraded shares of France’s second-biggest carmaker to “overweight” from “underweight.”
Separately, La Lettre de L’Expansion reported that Renault is studying a partial or complete exit from Volvo AB to raise cash, without citing anyone. Volvo, the world’s second-largest truckmaker, dropped 0.7 percent to 60.85 kronor.
Gamesa Corporacion Tecnologica SA, Spain’s largest maker of wind turbines, surged the most since November as Citigroup Inc. upgraded the shares to “buy” from “hold.” The stock increased 5.8 percent to 10.05 euros.
Etablissements Maurel & Prom SA slumped 6.6 percent to 10.94 euros after saying it abandoned its M’Bafou drilling well in the Congo as it wasn’t suitable to proceed to production.
Yara International ASA sank 6.9 percent to 225.7 kroner, the biggest drop since June. The world’s largest fertilizer producer said it agreed to buy Terra Industries Inc. for $4.1 billion and will sell as much as $2.5 billion of shares in a rights offer to fund the deal.
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