BLBG: Stocks in Europe, Asia Advance; Deutsche Bank, BNP Paribas Rise
Stocks in Europe and Asia gained as speculation that the government may not have to take control of America’s biggest banks lifted financial shares, while Japanese automakers climbed on a weaker yen. U.S. futures fluctuated between gains and losses.
Deutsche Bank AG, Germany’s biggest bank, and BNP Paribas SA, France’s largest, surged more than 5 percent as Federal Reserve Chairman Ben S. Bernanke suggested lenders need not be nationalized. Deutsche Boerse AG added 5.8 percent after saying costs in 2009 will be lower than it had anticipated. Toyota Motor Corp. advanced 4.2 percent as the yen’s drop to the lowest level in three months bolstered the value of overseas sales.
The MSCI World Index rose for a second day, increasing 0.9 percent at 9:36 a.m. in London. The gauge of 23 developed countries lost 14 percent in the previous nine days as companies from Anglo American Plc to Cie. de Saint-Gobain SA indicated the recession is worsening and U.S. Treasury Secretary Timothy Geithner failed to convince investors that his plan to rescue U.S. banks will work.
“There was some relief that the equity investor won’t be wiped out at any moment” by U.S. bank nationalizations, Christian Gattiker, head of equity research and strategy at Bank Julius Baer & Co., said in a Bloomberg Television interview. The firm oversees about $307.6 billion. “There’s anecdotal evidence that we’re seeing some stabilization” in the markets, he said.
Europe’s Dow Jones Stoxx 600 Index gained 1.1 percent as Henkel AG and Rhodia SA reported profit that beat analysts’ estimates. The MSCI Asia Pacific Index advanced 1.7 percent, rebounding from a five-year low.
Bair, Bernanke, Geithner
Futures on the Standard & Poor’s 500 Index slipped 0.2 percent after earlier adding as much as 0.4 percent. U.S. stocks advanced the most in a month yesterday, halting a six-day decline, as Federal Deposit Insurance Corp. Chairman Sheila Bair’s statement that large banks have enough capital helped lift equities from their lowest valuations in two decades.
Bernanke told lawmakers yesterday the government would use supervision instead of shareholder control to guide major banks, and warned against dismantling their franchises. The remarks eased concern Geithner’s financial plan would push aside private shareholders.
The Stoxx 600 has retreated 52 percent since the start of last year as credit-related losses at financial firms worldwide climbed to $1.1 trillion and Europe, the U.S. and Japan fell into the first simultaneous recessions since World War II.
UBS, RBS
Deutsche Bank jumped 6.5 percent to 19.34 euros, while BNP added 5.9 percent to 24.40 euros. UBS AG, the biggest Swiss bank, climbed 8.7 percent to 10.71 Swiss francs.
Royal Bank of Scotland Group Plc rose for a third day, increasing 8.1 percent to 23.9 pence. RBS and Lloyds Banking Group Plc are expected sign legally binding agreements to increase lending to small businesses and households by at least 20 billion pounds ($29 billion) apiece in exchange for government insurance on 500 billion pounds of loans and investments, the Guardian reported, without saying where it got the information.
Lloyds climbed 9.5 percent to 59 pence.
Deutsche Boerse gained 5.8 percent to 38.04 euros. Europe’s largest exchange by market value said costs in 2009 will be lower than it had anticipated as the company seeks to sustain growth as trading volume slows.
Fourth-quarter profit fell 18 percent from a year earlier, when earnings were boosted by the sale of real estate. Net income was 222.4 million euros ($285.5 million), beating the 206.6 million euros forecast of seven analysts surveyed by Bloomberg.
‘Bad Surprises’
Henkel climbed 9.9 percent to 19.63 euros. The German maker of Persil detergent said fourth-quarter profit unexpectedly rose to 249 million euros on higher sales after an acquisition.
“Earnings reports are reassuring,” Clemence Bounaix, who helps oversee about $5.2 billion as a fund manager at KBL Richelieu Gestion in Paris, said in a Bloomberg Television interview. “We’re not necessarily having bad surprises.”
Rhodia surged 11 percent to 3.04 euros for the third-biggest gain in the Stoxx 600. France’s largest maker of specialty chemicals reported fourth-quarter earnings before interest, taxes, depreciation and amortization of 141 million euros, beating the 84 million-euro forecast by Morgan Stanley analysts. The company said it will omit its final dividend.
Profits have declined 83 percent for 183 companies in the Stoxx 600 that released results since Jan. 12, data compiled by Bloomberg show.
Novartis, Japanese Automakers
Novartis AG slipped 2 percent to 46.04 francs. Europe’s fourth-largest drugmaker said first-quarter profit will be curbed by the strength of the dollar and higher costs in its pharmaceuticals division.
Toyota rose 4.2 percent to 3,220 yen. Honda Motor Co., which gets half its sales in North America, jumped 8.1 percent to 2,395 yen. Canon Inc., the world’s largest camera maker, climbed 6.4 percent to 2,505 yen.
The yen fell to 97.18 per dollar as of 7:59 a.m. in London, after touching 97.33, the weakest level since Nov. 25. A weaker yen boosts the value of overseas sales for Japanese companies when converted into the local currency.
Valeo SA rose 4.3 percent to 9.68 euros. France’s sovereign wealth fund acquired an 8.33 percent stake in Valeo, the country’s second-largest car-parts maker, as part of an effort to help the nation’s ailing auto industry, the government said.
Hammerson Plc jumped 7.2 percent to 333.25 pence. The U.K.’s fourth-biggest real estate investment trust was raised to “overweight” from “neutral” at JPMorgan Chase & Co.
