TeliaSonera rallies 7% after MegaFon dividend deal
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Most European stock markets partly reversed steep losses from the prior day and climbed back into positive territory on Tuesday, with gains for banks and oil firms lifting indexes and TeliaSonera AB rallying after a MegaFon dividend deal.
The Stoxx Europe 600 index XX:SXXP +0.18% took on 0.7% to 253.45. The index dropped to its lowest level since mid-January on Monday on the back of weak manufacturing data in the region and political uncertainty in France and Netherlands.
“We need to be cautious. It’s still a difficult market,” said Jacques Porta, fund manager at Paris-based Ofi Patrimoine. “The debt crisis is not over here in Europe and the U.S. economy seems to be okay, but not very strong.”
“We will see some bearish markets where stocks go lower,” he added.
Posting the biggest gain in the index, Finnish Kone Oyj FI:KNEBV +6.92% surged 8.4% after the engineering group upgraded its outlook for 2012 on the back of strong orders and reporting a 17.8% sales growth in first quarter. Finland’s OMX Helsinki 25 index XX:OMXH25 +2.18% rallied 3.1% to 2,045.74, outperforming all other European indexes.
On the downside in Finland, Nokia Corp. FI:NOK1V -1.18% NOK -1.10% lost 1.9% after Fitch Ratings downgraded the firm’s credit rating to ‘BB+’ from ‘BBB’ with a negative outlook.
TeliaSonera SE:TLSN +5.82% jumped 7.3%. The Swedish telecom operator reached a deal with other shareholders in Russian MegaFon, in which MegaFon will pay a $5.15 billion dividend to its shareholders and seek an initial public offering. TeliaSonera: MegaFon to pay out $5.15B, seek IPO
Among other notable advancers in Europe, Michelin FR:ML +6.04% added 6.9% after it reported a 5.1% increase in revenue in first quarter and reaffirmed its 2012 outlook. HSBC lifted the stock to overweight from neutral.
The French CAC 40 index FR:PX1 +0.87% traded 1% higher at 3,129.70, further buoyed by STMicroelectronics NV FR:STM +2.74% up 4.3%. The chip maker said second-quarter revenue is expected to grow between 4.5% and 10.5%, following a quarter of weak sales.
Banks further helped lift the index and Credit Agricole SA FR:ACA -2.18% rose 1%, Société Générale SA FR:GLE -1.44% added 1.4% and BNP Paribas SA FR:BNP -0.92% advanced 0.7%.
Elsewhere, Nordea Bank AB SE:NDASEK +3.03% NRBAY +1.72% jumped 4% after first-quarter profit beat analyst expectations.
KBC Group NV BE:KBC +3.61% surged nearly 5% after ING upgraded it to buy from hold.
Spanish stocks moved out of recent negative territory, with the IBEX 35 index XX:IBEX +0.90% up 1.6% to 6,959.50. The government sold 1.93 billion euros ($2.53 billion) in short-term bills, near the top end of its target range. Spain sells 3- and 6-month bills
Biotech firm Grifols SA ES:GRF +10.04% surged 6.4% as profit for the first quarter doubled.
In Germany, the DAX 30 index DX:DAX +0.22% was up 0.7% to 6,571.19. Deutsche Lufthansa AG DE:LHA -3.83% rose 3.9% after Credit Suisse upgraded the airline to outperform from neutral.
Car makers were also higher, Volkswagen AG DE:VOW -3.54% gaining 2.1% and Daimler AG DE:DAI +0.65% 1.6.%
In the U.K., International Consolidated Airlines Group SA UK:IAG +2.71% took on 3.9% following an upgrade to outperform from neutral from Credit Suisse. The FTSE 100 index UK:UKX +0.10% was 0.4% higher at 5,686.38.
Oil firms further helped support the index. BP PLC UK:BP +1.36% BP +0.72% added 1.5% and BG Group PLC UK:BG +1.01% rose 1.7%. Oil prices swung between small gains and losses.
British banks followed the sector trend in Europe and Barclays PLC UK:BARC +0.07% BCS +0.08% increased 1.4%, while Lloyds Banking Group PLC UK:LLOY +0.53% LYG +0.27% was 2.2% higher.
Bucking the positive trend in London, Imperial Tobacco Group PLC UK:IMT -1.07% ITYBY -1.06% gave up 1% and British American Tobacco PLC UK:BATS -1.51% BTI -1.56% lost 1.3% after Bank of America Merrill Lynch downgraded both companies to neutral from buy.
Sara Sjolin is a MarketWatch reporter, based in London.
