“Setting Rescue Limit” Raises the European Stocks

Big 5

European stocks rose, extending the best first-quarter rally for the Stoxx Europe 600 Index since 2006, as euro-area finance ministers set the overall ceiling for the rescue of the region’s indebted nations at $1.1 trillion.

Brisa-Auto Estradas de Portugal SA, Portugal’s biggest highway operator, surged 15 % after shareholders with a combined 50 % stake offered to buy the rest of the company. Daimler AG (DAI) rallied as Bank of America Corp. recommended the shares. HeidelbergCement AG (HEI) jumped 4.8 % after HSBC Holdings Plc raised its rating on the stock.

The Stoxx 600 (SXXP) gained 0.7 % to 262.64 at 3:19 p.m. in London, trimming this week’s decline to 1.1 %, as U.S. personal spending topped forecasts. The benchmark gauge has surged 7.4 % this year as Greece obtained a second bailout and U.S. economic data beat economist projections.

“The U.S. recovery is now sustainable,” said Larry Hatheway, a London-based economist and asset-allocation strategist at UBS AG. “Europe is still at pains but northern Europe remains one of the stronger areas in terms of growth.”

The volume of shares changing hands in the companies listed on the Stoxx 600 was 5.6 % higher than the average of the last 30 days.

National benchmark indexes rose in all of the 18 western European markets, except Greece. Germany’s DAX Index gained 0.7 %. The U.K.’s FTSE 100 added 0.6 % and France’s CAC 40 advanced 1 % %.

Euro-area ministers, meeting in Copenhagen today, set the maximum lending volume of the proposed European Stability Mechanism at 500 billion Euros ($667 billion) and the combined lending ceiling of the ESM and the temporary fund – the European Financial Stability Facility – at 700 billion Euros.

This, in addition to the 102 billion Euros already paid to support current rescue programs, takes the total size of the firewall to 800 billion Euros, the Euro group said.

“Finally, robust firewalls have been established,” the ministers said in a statement. “This comprehensive strategy has paid off and led to a significant improvement in market conditions.”

 The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment for March rose to 76.2 from 75.3 at the end of last month. Economists had projected a reading of 74.5 after a preliminary figure of 74.3.

Brisa surged 15 % to 2.69 Euros, its biggest gain since at least 1997. Jose de Mello SGPS SA , a holding company for one of Portugal’s richest families, and Aeif Apollo Sarl are offering 2.66 Euros in cash per Brisa share, they said yesterday after trading ended in Lisbon.

Daimler rose 1.7 % to 45.03 Euros as a gauge of carmakers was the second-best-performing group in the Stoxx 600. (SXXP) Bank of America recommended buying Daimler’s shares, saying the company “is finally cutting out costs, reducing complexity, simplifying engineering and refreshing the product portfolio.”

Bayerische Motoren Werke AG (BMW) advanced 1.8 % to 66.99 Euros. Preferred shares of Volkswagen, Europe’s largest maker of automobiles, gained 1.1 % to 131.05 Euros.

Michelin & Cie., the world’s second-largest tiremaker, climbed 2.2 % to 55.73 Euros and Continental AG (SXXP) rallied 4.6 % to 72.77 Euros.

BHP Billiton, the world’s biggest mining company, added 2.5 % to 1,923.5 pence as a gauge of basic-materials shares rose 2.6 %. Rio Tinto Group, the third-largest mining company, gained 2.8 % to 3,469 pence.

Red Electrica Corp SA (REE), the operator of Spain’s electricity network, rose 2.8 % to 36.19 Euros. Iberdrola, the nation’s biggest power company, gained 2.6 % to 4.3 Euros. Enagas SA, the operator of the natural gas grid, added 3.4 % to 14.36 Euros.

Spain will raise power prices on April 1 by 7 %, natural gas prices by 5 % and cut capacity and distribution payments to power companies to comply with an order from the Supreme Court.

HeidelbergCement jumped 4.8 % to 45.62 Euros after HSBC upgraded the stock to overweight from neutral, meaning that investors should hold more shares than are represented in benchmark indexes. Lafarge SA (LG), the world’s biggest cement maker, advanced 5.2 % to 36.02 Euros.

Meyer Burger Technology gained 2.4 % to 14.95 Swiss francs after HSBC raised its recommendation on the shares to neutral, the equivalent of hold, from underweight, the equivalent of sell, as Bloomberg stated.

Commerzbank AG (CBK) added 1 % to 1.89 Euros. Germany’s second-largest bank plans to set up a so-called bad bank to liquidate its Eurohypo AG public-finance and commercial-property unit over the coming years, Handelsblatt reported, citing unidentified people in the finance industry.

Vestas Wind Systems A/S (VWS), the world’s largest wind-turbine maker, surged 4.1 % to 57.85 kroner. The stock was raised to neutral from sell at UBS AG, which said the company could be a target for acquisition.

Subsea 7 SA added 2.5 % to 150.1 kroner. The oilfield-services provider won a $175 million contract for work at the Cheviot Oil Field.

Telecom Italia SpA (TIT) fell 2.3 % to 88 euro cents. Italy’s biggest phone company posted a bigger-than-estimated loss in 2011 after Italy’s largest phone company wrote down goodwill for 7.3 billion Euros.

Shire Plc (SHP) dropped 4.2 % to 2,030 pence after saying its Lialda drug for ulcerative colitis failed in a trial that would have expanded its use and potentially reach sales of more than $2 billion.