Azernews.Az

By Bloomberg

Confidence is returning to the market, with European stocks rising for the second time in three days.

The Stoxx Europe 600 Index climbed 2.9 percent to 360.33 at 10:16 a.m. in London, extending the rally after people familiar with the matter said China’s government intervened to boost the equity market Thursday. All industry groups in Europe advanced, mirroring increases in commodities. U.S. index futures also rose after the Standard & Poor’s 500 Index managed to maintain gains on Wednesday following a failed attempt on Tuesday.

“The U.S. is leading the way,” said Peter Braendle, who manages about $430 million at Zuercher Kantonalbank in Zurich. “This decline created the opportunities for some good prices in Europe. The economic situation is improving, which is helping the companies and the results we are getting are OK.”

The benchmark gauge for European shares closed down 15 percent from its April record on Wednesday, with its valuation near its lowest level since January. The Stoxx 600 traded at 15.1 times estimated profit yesterday and reached 14.7 times on Monday.

Some companies are being boosted by financial reports. Bouygues SA rose 6.2 percent after the French conglomerate raised its 2015 profit target for its phone operations. Fresenius SE added 4.2 percent after Germany’s largest medical- supplies provider said it expects to increase its dividend by at least 20 percent this year.

Profit Growth

Analysts expect Stoxx 600 companies will have profit growth of 6.2 percent this year.

Almost all western-European markets climbed more than 1 percent, with Germany’s DAX Index and Portugal’s PSI 20 Index -- among the most hurt in the selloff -- jumping at least 3 percent.

The Stoxx 600 has been particularly volatile this week, plunging the most since 2008 on Monday to then rally more than any time since 2011 on Tuesday. It fell again on Wednesday, ending down 1.8 percent after paring losses earlier in the day. A measure tracking expectations for stock swings reached an almost four-year high. The VStoxx Index slipped 15 percent on Thursday.

While traders kept pouring money into European equities throughout the rout, the two biggest exchange-traded funds tracking the region’s stocks had their first day of outflows in months.

But today, optimism prevails. Miners and automakers are leading the gains in the Stoxx 600. Irish construction group CRH Plc climbed 5.1 percent after agreeing to buy Los Angeles-based C.R. Laurence Co., expanding in products used in window installations.

Among stocks that dropped, Pernod Ricard SA fell 4.1 percent after the world’s second-largest distiller reported full-year profit that missed estimates. Gemalto NV lost 7 percent after reporting that adjusted earnings fell short of projections.