BLBG: Europe Stocks Gain Fourth Day to Extend Highest Level Since 2008
European stocks advanced for a fourth day, extending their highest level in seven years, amid speculation that the European Central Bank will announce a plan for quantitative easing this week.
The Stoxx Europe 600 Index rose 0.8 percent to 355.95 at 11:03 a.m. in London, with banks and miners leading gains among 19 industry groups. The equity benchmark gauge has rallied 4.8 percent in the four days since the Swiss central bank unexpectedly abandoned its currency peg against the euro, a move that increased speculation of a government-bond buying program from the ECB.
“The market is very clearly expecting a significant move from the ECB,” said Alex Scott, who helps oversee about $11 billion as deputy chief investment officer at Seven Investment Management Ltd. in London. “As optimism builds about that stimulus package this week, it’s critical for the ECB to signal that QE will continue until Europe’s growth problems are solved. Monetary policy needs to do the heavy lifting to create an environment in which confidence can continue to recover.”
ECB President Mario Draghi will make his biggest push yet to steer the euro area away from deflation by introducing quantitative easing at the Jan. 22 meeting, according to 93 percent of respondents in a Bloomberg News survey. The ECB president will probably announce a 550 billion-euro ($639 billion) bond purchase program, economists say.
German Confidence
Germany’s DAX Index traded at a record as a report from the ZEW Center for European Economic Research showed investor confidence jumped to the highest level in 11 months in January, beating forecasts.
National benchmark indexes in Spain and Italy rallied at least 0.9 percent. Portugal’s PSI 20 Index rose 0.5 percent for a seventh day of gains, its longest streak in a year.
A gauge of Stoxx 600 commodity companies advanced 1.7 percent as data showed Chinese gross domestic product expanded in the three months through December more than forecast. Industrial output and retail sales for the world’s biggest copper consumer also beat estimates. Glencore Plc added 3 percent, Antofagasta Plc gained 2 percent, and Anglo American Plc climbed 3.2 percent.
Among stocks moving on corporate news, Royal Philips NV rose 3.6 percent as Financieele Dagblad reported that private equity firms KKR & Co. and CVC Capital Partners Ltd. have a joint interest in the company’s lighting unit.
Novozymes A/S climbed 4.8 percent after fourth-quarter profit exceeded estimates. Deutsche Lufthansa AG gained 4.2 percent as Barclays Plc recommended buying the shares.
SAP SE dropped 4.5 percent after the largest maker of business-management software cut its 2017 profit target.
Unilever (UNA) slipped 1.3 percent. The company, whose detergents and deodorants are used by 2 billion consumers daily, said its financial performance in 2015 will be similar to last year amid weaker demand in emerging markets such as China. Sales rose 2.9 percent in 2014, the worst performance in more than a decade.
To contact the reporters on this story: Alan Soughley in Frankfurt at asoughley@bloomberg.net; Sofia Horta e Costa in London at shortaecosta@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Alan Soughley
