Infineon Technologies advances; Standard Chartered shares lower
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares posted gains on Monday, with automakers advancing and commodity-sector firms climbing, as one broker said low valuations and sentiment should limit downside for stocks.
The Stoxx Europe 600 index (ST:SXXP 250.40, +2.07, +0.83%) rose 0.8% to 250.30.
The index closed Friday with a 0.6% loss, bringing weekly losses to 2.8%, ahead of the G-20 meeting where leaders pledged to cut deficits and debt. Read more on G-20.
Morgan Stanley European equity strategists said Monday that they believe a full-blown double-dip in European earnings, U.S. and global GDP is unlikely.
"Employment data seem to us to be the key metric to watch but we think the prospects of an improvement in payrolls are good given strength in job surveys. However, many commonly followed lead indicators seem likely to slow further, which may mean growth fears persist for another month or two," they said.
"Cheap valuations and already cautious sentiment offer support for markets and limit the downside in the absence of a double dip recession," they added.
Of the regional benchmarks, the U.K. FTSE 100 index (UK:UKX 5,062, +15.58, +0.31%) rose 0.3% to 5,062.79, the German DAX index (DX:DAX 6,142, +71.15, +1.17%) rose 1.1% to 6,138.13 and the French CAC-40 index (FR:PX1 3,561, +40.87, +1.16%) advanced 1.1% to 3,557.15.
U.S. stock futures were pointing to a higher start on Wall Street, with Dow Jones Industrial Average futures up 24 points. Asian shares ended lower.
On Monday, investors bought up shares in Spanish oil and gas firm Repsol (ES:REP 17.36, +0.46, +2.72%) (REP 21.13, -0.02, -0.09%) , up 2.5%, after the firm was upgraded to buy from neutral at Bank of America Merrill Lynch.
The broker said an aggressive 28 billion euro investment program from 2010 to 2014 will ultimately drive top quartile exploration and production growth, significantly enhance the profitability of its refineries and materially grow its liquefied natural gas business.
Elsewhere in the oil and gas sector, BP (UK:BP. 311.65, +7.05, +2.32%) (BP 28.12, +1.10, +4.07%) shares rose 2.9%, paring losses made since the Deepwater Horizon rig explosion in the Gulf of Mexico on April 20 triggered a massive oil spill in the Gulf of Mexico, to around 51%.
Costs relating to the oil spill have risen to $2.65 billion, the firm said Monday. However, fears that tropical storm Alex would disrupt the clean-up operation subsided with the storm headed to the far west of the site. Read more on BP.
Autos were also advancing in Europe, taking back losses made Friday when negative broker comment weighed on the sector, with Daimler (DE:DAI 42.91, +0.72, +1.71%) shares up 2.2% and Volkswagen (DE:VOW3 75.90, +0.70, +0.93%) preference shares up 1.2%.
Infineon Technologies (DE:IFX 5.10, +0.12, +2.43%) rose 3%.
The firm is not involved in participation talks with Russian conglomerate Sistema, Dow Jones Newswires reported on Monday, citing a spokesman for Infineon.
The spokesman's statement was in response to a report in Financial Times Deutschland, which said that Russian President Dmitry Medvedev and Prime Minister Vladimir Putin are pressuring German Chancellor Angela Merkel to let Sistema take a 29% stake in the German semiconductor maker.
Standard Chartered (UK:STAN 1,719, -23.50, -1.35%) shares declined 1.8%.
The Asian-oriented, London-listed bank, said first-half profit and income were "ahead" of the comparable period when the benefit of a $248 million buyback of notes is excluded. Income is expected to be broadly flat on the first half of 2009, but to show double-digit growth over the second half of 2009.
Consumer banking and wholesale banking client income are performing particularly well, but have been partly offset by weaker own account income, the lender said.
Shares of Germany's Q-Cells (DE:QCE 5.57, -0.32, -5.42%) lost 4.9%.
The firm was downgraded to sell from neutral at Goldman Sachs. The broker said "we expect further declines in solar-cell prices in the coming years to lead to more losses in the cell manufacturing business, which we believe will only at best be offset by contributions from new activities."
Shares of Swedish retailer Hennes & Mauritz (SE:HMB 216.50, -3.90, -1.77%) declined 2%.
The firm's CEO told French newspaper La Tribune over the weekend that the company isn't for sale, Dow Jones Newswires reported.
