MW: Europe stocks rise on Greek hopes, China easing
TNT Express surges 55% after takeover bid
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets rose Monday, led by banks amid hopes that a Greek bailout could get approval later in the day, while resource stocks were also up after a weekend move by China to ease reserve requirements for the country’s banks.
The Stoxx Europe 600 index XX:SXXP +0.75% added 0.8% to 268.06, extending gains into a fourth consecutive day. U.S. stock markets will be absent from the action on Monday owing to the Presidents’ Day holiday.
The biggest gainer in the index, TNT Express NV NL:TNTE +55.12% , surged 55.4% after the firm rejected a 4.9 billion euro ($6.45 billion) takeover bid worth 9 euros a share from United Parcel Service Inc. UPS -0.25% last Friday.
Bloomberg News reported that TNT wants a higher offer, but TNT declined Monday to comment. Credit Suisse upgraded the stock to neutral from underperform after the bid. PostNL NV NL:PNL +48.31% , which holds a 29.9 stake in TNT, rallied 48.9%.
Banks jumped ahead on Monday, with investors fuelled by optimism that the euro-zone finance ministers could approve a €130 billion bailout package for Greece and a debt-swap deal with private creditors at a meeting in Brussels in the afternoon.
“We expect a deal to be done, however, we do not anticipate it being sufficient to prevent Greece from coming back to the table again in roughly 5-6 months time,” said Stephen Pope, managing partner at Spotlight Ideas, in a note. ”The nation is in the fifth straight year of economic contraction and without growth it is almost impossible to see whatever funds are lent now or in the future being serviced properly or repaid.”
The Athens General Index GR:GD +0.24% turned negative by the afternoon, off 0.4% to 820.88, with shares of Coca-Cola Hellenic Bottling Co. SA GR:EEEK -1.97% down 2.5%.
Banks led across Europe. Credit Agricole SA FR:ACA +2.74% FR:ACA +2.74% took on 2.5%, BNP Paribas SA FR:BNP +1.71% gained 1.5% and Societe Generale SA FR:GLE +1.39% climbed 1.2%.
The French CAC 40 index FR:PX1 +0.83% added 0.8% to 3,467.66.
In London, oil firms BP PLC UK:BP +2.36% BP -0.25% and BG Group PLC UK:BG +1.42% took on 2.4% and 1.5% respectively.
Oil futures for March delivery CLH2 +2.64% last traded atop $105 a barrel on Monday, surpassing a nine-month high of over $103 reached in New York on Friday. Oil has been gaining on geopolitical concerns and optimism about Greece. On Sunday, Iran said it had halted crude exports to France and the U.K. Read more about rising oil prices .
Resource stocks also rose after the People’s Bank of China Saturday cut the reserve requirement ratio for banks by 50 basis points to spur lending. The country is a big user of natural resources, and attempts to stimulate growth can mean increased demand for commodities.
The U.K. FTSE 100 index UK:UKX +0.68% moved 0.7% higher to 5,943.91, further buoyed by miners. Antofagasta PLC UK:ANTO +2.45% added 2.5%, BHP Billiton PLC UK:BLT +2.65% rose 2.6%, Rio Tinto PLC UK:RIO +2.64% RIO +0.04% increased 2.8% and Polymetal International PLC UK:POLY +1.12% was up 1.3%.
German banks Commerzbank AG DE:CBK +2.45% and Deutsche Bank AG DE:DBK +2.36% rose 2.5% and 2.2% respectively, lifting the DAX 30 index DX:DAX +1.27% 1.3% to 6.935.90.
The German index has rallied the most among the major country-specific indexes since New Year’s and rallied 17.6% year-to-date. J.P. Morgan Cazenove said Monday that the Dax index remains its preferred pick at a country level as it is one of the most attractive indexes relative to bonds.
“It is beneficiary of a rebound in cyclicals, which we do not think is finished yet,” J.P. Morgan Cazenove analysts said in a note.
Within the index, the analysts highlighted HeidelbergCement AG DE:HEI +2.51% , up 2.2% Monday, Infineon Technologies AG DE:IFX +2.20% up 2.6%, Volkswagen AG DE:VOW +0.63% , trading 0.4% higher and Bayer AG DE:BAYN +1.21% which added 1.6%.
Among other notable gainers, STMicroelectronics NV IT:STM +4.77% STM +0.29% jumped 6.1%. The chip maker said Monday it appointed Chief Financial Officer Carlo Ferro to chief operating officer at ST-Ericsson, where he will focus on the turnaround of the joint venture. Shares of LM Ericsson Telephone Co. SE:ERICB +1.06% added 1.1% in Stockholm.
Clariant AG CH:CLN +3.42% put on 3.5% after Citigroup upgraded the stock to buy from neutral on the back of “two quarters of solid results, which have beaten expectations.”
Among biggest decliners in Europe, Veolia Environnement SA FR:VIE -3.87% shed 3.9%. French environment minister Nathalie Koziuscko-Morizet said in an interview it was up to the board of Veolia to decide the fate of Chief Executive Antoine Frerot. Earlier news reports had stated that Frerot would be forced to leave with the support of the government.
Aveva Group PLC UK:AVV -1.18% lost 1.2% after UBS downgraded the stock to sell from neutral, citing that the software firm is unlikely to provide “enough upside surprises to sustain momentum” in 2012.
