BLBG: Europe Stocks Rise 3rd Day as Swiss Shares Climb After SNB, Fed
European shares climbed for a third day on growing confidence that central banks around the world will support the economy, while energy stocks rebounded further.
The Stoxx Europe 600 Index rallied 1.9 percent to 335.59 at 11:35 a.m. in London, with oil-and-gas companies rallying 2.9 percent. Switzerland’s Novartis AG and Roche Holding AG contributed the most to the Stoxx 600 advance today, and the Swiss Market Index (SMI) also climbed 1.9 percent after the nation’s central bank introduced its first negative deposit rate since the 1970s. The announcement came after Chair Janet Yellen said the Federal Reserve will probably hold rates near zero at least through the first quarter and that they may not return to more normal levels until 2017.
“You could see interest rates progressively rise,” said Karim Bertoni, who helps manage $3.3 billion at de Pury Pictet Turrettini & Cie. in Geneva, referring to the Fed’s announcement yesterday. “But it will be a controlled increase that is monitored with attention by the Fed. Relative to bonds, equities are still more attractive. We’re not buying at the lowest level but it’s still a bargain.”
All 19 industry groups in the Stoxx 600 climbed today, with energy companies heading for their biggest three-day gain since January 2009. Total SA rose 2.8 percent and Statoil ASA added 6.1 percent.
Selloff Rebound
The Stoxx 600 advanced 1.9 percent in the past two days, rebounding after a selloff in energy companies and Greek stocks pushed it for its biggest six-day loss in three years. The gauge, which erased its annual gains on Dec. 15, is now up 2.3 percent for 2014.
Greece’s ASE Index (ASE) fell 2.9 percent after Prime Minister Antonis Samaras failed to gather enough support for his nominee in a parliamentary vote for a new head of state. That means the nation is moving a step closer to early elections, opening the door for the ascent of an anti-austerity party.
The stocks gauge slumped the most since 1987 last week on concern a snap parliamentary election will reintroduce the turmoil that threatened the European currency union in 2012.
Swiss companies rallied today. Novartis increased 2.8 percent and Roche gained 2.3 percent. ABB Ltd. added 2.3 percent after saying it will propose former Royal Dutch Shell Plc Chief Executive Officer Peter Voser to become chairman after Hubertus von Gruenberg decided not to stand for re-election.
Among other companies moving on corporate news, Alcatel-Lucent SA jumped 5.1 percent after a Manager Magazin report that Nokia Oyj resumed merger talks with the French company. Swisscom AG fell 5.6 percent after French billionaire Xavier Niel’s private holding company agreed to buy Orange Switzerland.
Aveva Group Plc (AVV) slumped 6.1 percent after JPMorgan Chase & Co. and Morgan Stanley lowered their rating on the U.K. software maker. JPMorgan said offshore companies may be more cautious with new investments after the decline in oil prices.
The volume of Stoxx 600 shares changing hands was 34 percent greater than the 30-day average today. Benchmark gauges of Portugal, Spain and France rallied more than 2 percent.
To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net
