Azernews.Az

Thursday March 28 2024

Europe stocks rise most in five weeks as exporters gain on euro

11 March 2015 18:11 (UTC+04:00)
Europe stocks rise most in five weeks as exporters gain on euro

By Bloomberg

European stocks rose the most in five weeks as a weaker euro boosted exporters.

The Stoxx Europe 600 Index added 1.2 percent to 394.49 at 1:05 p.m. in London. Automakers led gains as the single currency traded near a 12-year low and headed for a record quarterly drop. France’s CAC 40 Index and Germany’s DAX Index posted the biggest gains of 18 western-European markets.

Euro-area central banks have bought German, Belgian, French, Italian and Spanish bonds this week, sending borrowing costs across Europe to record lows. The purchases are part of the European Central Bank’s asset-buying program, known as quantitative easing. ECB President Mario Draghi said today that they will push inflation in the euro area back toward its goal.

“The most important thing that QE is doing is giving Europe a fantastically cheap currency,” said David Hussey, head of European equities at Manulife Asset Management in London. “The euro has absolutely collapsed. This is shifting growth and demand around the world -- Europe is an export-led economic bloc and that’s good news. Earnings growth will be really strong and the market will follow. Carmakers and chemical stocks are the obvious plays.”

A weak euro makes European goods cheaper to buy oversees, boosting demand and generally translating into more sales.

The Stoxx 600 had fallen 1.2 percent through Tuesday from a seven-year closing high on March 6, as energy shares slid, and concern grew the Federal Reserve is nearing an interest-rate increase. The Fed next meets on March 17-18.


Carmakers Jump


Gauges of carmakers and chemical companies were the top two performers of the 19 industry groups on the Stoxx 600. Volkswagen AG and BMW AG rose at least 2.9 percent, while BASF SE added 2.5 percent.

A measure of energy companies rebounded from its biggest decline in more than two months. Royal Dutch Shell Plc and Total SA contributed the most to the advance.

Among stocks moving on corporate news, Adecco SA added 3.6 percent after the world’s largest provider of temporary workers posted better-than-expected net income for 2014.

Remy Cointreau SA rose 4.8 percent as Goldman Sachs Group Inc. recommended buying the shares, saying the cognac maker will benefit from a weaker euro and a rebound in demand from China.

Bayer AG gained 2.8 percent. The company said it intends to increase health-care sales by an average of about 6 percent a year through 2017 as it focuses on life sciences and exits the plastics industry.


Deutsche Post


Deutsche Post AG declined 3.4 percent. Europe’s largest postal service reported worse-than-forecast quarterly earnings and said operating profit growth this year may be limited to less than 3 percent.

JCDecaux SA dropped 6 percent after the Decaux family, its largest shareholders, sold a stake of 12 million shares.

Investors will also be watching Greece. A team from the Mediterranean nation’s international creditors is heading for Athens, as the government prepares to open up its accounts for inspection. Officials from the ECB, European Commission and International Monetary Fund are due to begin talks in Brussels on Wednesday.

Loading...
Latest See more