Stoxx Europe 600 closes at highest level since summer 2011
By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—European stock markets rose to the highest level since early June 2011 on Thursday, after a volatile trading session that saw a mixed bag of U.S. data and earnings reports send bourses swinging between gains and losses.
The Stoxx Europe 600 index XX:SXXP +0.19% rose 0.2% to close at 276.18, fourth, consecutive daily gain.
“We’ve had a very good week because of Spain. The problems are not over, but we’re going in the right direction,” said Koen de Leus, senior economist at KBC Group.
“I think investors think, if Spain is safe, then maybe Italy will follow as well. But it could also be the other way around. If Spain is safe, then the market will attack Italy,” he said.
Among notable movers, Swiss food major Nestle SA CH:NESN -1.69% XE:NESM -1.38% dropped 1.7% after nine-month results showed a slowdown in growth in emerging markets. See: Nestlé sales beat expectations
Dutch painting firm Akzo Nobel NV NL:AKZA -3.98% lost 4%, as it swung to a loss in the third quarter?due to a 2.5 billion euro ($3.28 billion) impairment on its decorative paints business. See: Akzo Nobel swings to net loss on impairment.
The broader stock market struggled for direction in afternoon action, after a round of U.S. data gave different assessments of the economy.
Initial jobless claims rose by 46,000 to 388,000 last week. Analysts were expecting a claims total of 365,000. See: U.S. jobless claims climb 46,000 to 388,000 and See: Ignore volatile jobless data: Hiring still slow
In addition, the Federal Reserve Bank of Philadelphia’s index for manufacturing activity rose to 5.7 in October from negative 1.9 in September, beating analysts’ expectations. See: Philly factory activity improves in October
U.S. stocks were mixed on Wall Street. See: U.S. stocks fall as jobless claims climb
After the European market close, attention turned to Brussels, where the European Council meets for a two-day meeting at 5:45 p.m. Brussels time, 11:45 Eastern, with analysts expecting few major developments.
“Of the current hot topics it is only the time path towards a genuine banking union that is on the agenda,” analysts at Danske Bank said in a note. See: Euro rises, but don't credit the EU summit
“A Spanish request for a precautionary program and a two-year extension of the Greek program will be discussed on the sidelines, but we do not expect any clarification on the ‘hot topics’ before November,” they said.
Chinese data
Investors also digested data from China, where third-quarter gross domestic product figures showed the economy grew by 7.4%, as expected, down from 7.6% in the second quarter. However, September data pointed to a pickup in economic growth, suggesting that the slowdown in third quarter could mark the low point in activity. See: China’s GDP growth slows but may mark bottom
Mining firms moved higher after the data, with Rio Tinto PLC UK:RIO +2.39% RIO +1.67% AU:RIO +4.80% up 2.4% and BHP Billiton PLC UK:BLT +1.69% BHP +1.88% AU:BHP +3.32% rising 1.7%.
The FTSE 100 index UK:UKX +0.10% added 0.1% to 5,917.05, although food and drinks makers were on the decline.
SABMiller PLC UK:SAB -2.09% gave up 2.1%, after it flagged slowing demand in Latin America as it reported half-year earnings. See: SABMiller sales up, but Latin America demand slows
Unilever PLC UK:ULVR -1.11% UL -1.14% fell 1.1%.
Royal Dutch Shell PLC UK:RDSB -1.37% RDS.B -1.27% dropped 1.4%, after Goldman Sachs lowered its view on the European oil sector to cautious from attractive and added the U.K. oil major to its sell list.
The bank further reiterated its sell rating on French oil group Total SA FR:FP -0.40% TOT -0.23% , its shares declining 0.4%. Oil prices hovered around the flat line. See: Oil holds steady as dollar inches higher
Also in France, Pernod Ricard SA FR:RI -2.40% gave up 2.4%. Peer firm Rémy Cointreau SA FR:RCO -8.02% slumped 8% outside the main index in Paris, after the liquor producer reported that second quarter organic revenue growth slowed to 5.3% from a strong first quarter. Growth in sales of Remy Martin cognac slowed in Europe.
The CAC 40 index FR:PX1 +0.22% closed 0.2% higher at 3,535.18, with Société Générale SA FR:GLE +2.53% up 2.5%.
In Spain, the yield on 10-year government bonds ES:10YR_ESP -0.08% dropped 14 basis points to 5.32%, according to electronic trading platform Tradeweb.
The Treasury sold €4.6 billion in a debt sale, topping the target range at €4.5 billion, while borrowing costs dropped across all maturities on sale. See: Spain tops target to sell 4.6 bln euros of bonds
The IBEX 35 index XX:IBEX -0.34% , however, lost 0.3% to 8,100.30, with Banco Santander SA ES:SAN -1.60% SAN -1.26% down 1.6%.
Among German shares, ThyssenKrupp AG DE:TKA +1.62% gained 1% after Exane BNP Paribas lifted the stock to neutral from underperform.
The DAX 30 index DX:DAX +0.58% picked up 0.6% to 7,437.23.
Among other notable gainers, Nokia Corp. FI:NOK1V +1.00% NOK -2.93% inched 1% higher, after adjusted operating profit beat expectations. See: Nokia swings to adjusted operating profit in Q3
Sara Sjolin is a MarketWatch reporter, based in London.
