European Stocks Rise for Fifth Day; Energy Shares Gain

Big 5

European stocks advanced for a fifth day, extending their biggest gain in more than two years.

The Stoxx Europe 600 Index rose 0.7 percent to 342.5 at 12:11 p.m. in London and climbed as much as 0.9 percent, with a gauge of oil-and-gas companies rallying 0.8 percent. The European measure is heading for a five-day gain of 5.9 percent, the most since July 2012. The index advanced 3 percent last week, the biggest jump of the year and a fifth gain in six weeks. Rebounding energy shares, the Federal Reserve saying it will probably hold rates near zero at least through the first quarter, and the Swiss National Bank introducing its first negative deposit rate since the 1970s helped spark the rally.

“The fact that oil has stabilized is giving stocks a little room to move higher,” Jasper Lawler, a market analyst at CMC Markets Plc in London, said by telephone. “Even though many people viewed lower oil prices as a net positive for the economy, there were certain areas of the economy that were over-leveraged and that raised some concerns.”

Speculation that the European Central Bank will start buying government bonds sent the Stoxx 600 up 13 percent from this year’s low in October through an almost seven-year high on Dec. 5. It then posted its worst six-day slump in three years as energy shares sank with oil prices. The European index has regained more than half of those losses and ended last week 3 percent below its December high.

Total, Shell

Energy companies are heading for their biggest five-day jump since January 2009 and climbed as much as 2.7 percent earlier today. Total SA added 1.9 percent. Afren Plc jumped 5.6 percent after confirming it received a merger approach from Nigeria’s Seplat Petroleum Development Co.

Germany’s DAX rallied 1.1 percent and France’s CAC 40 Index gained 0.9 percent for some of the biggest increases among western-European gauges. Greece’s ASE Index (ASE) was little changed after rising as much as 2.4 percent and falling 0.7 percent.

Among companies moving on corporate news, Roche Holding AG added 1.3 percent after one of its drugs was approved in Switzerland to treat cervical cancer. Indra Sistemas SA climbed 2.5 percent after Spanish newspaper El Mundo reported Antonio Hernandez Mancha, a lawyer and business intermediary, is in talks with the government to buy a 20 percent stake in the company for British fund Hanson.

Delta Lloyd NV fell 4.3 percent after saying the Dutch central bank ordered it to dismiss its chief financial officer by 2016 and fined the insurer for allegedly using confidential information when it cut interest-rate hedges in 2012. Banca Monte dei Paschi di Siena SpA lost 5.8 percent after its chairman told Austrian newspaper Der Standard that the Italian lender is seeking to sell assets and increase capital.

Investors will also be watching U.S. data to gauge the strength of the global economy. A report may show the number of existing home sales slipped in November. In Europe, a release from the European Commission will show consumer confidence improved in December, economists forecast.

The volume of Stoxx 600 shares changing hands was 28 percent lower than the 30-day average, data compiled by Bloomberg show.

Source : Bloomberg

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