European Stocks Advance for a Second Day as Carmakers Lead Gains

Mar 26, 2014 1:06 pm ET

March 26 (Bloomberg) -- European stocks rose for a second day, with the Stoxx Europe 600 Index posting its biggest two-day gain in three weeks, as auto companies climbed.

PSA Peugeot Citroen increased 2.8 percent, leading a gauge of auto-related stocks higher, as La Tribune newspaper reported the carmaker got more than 120,000 orders in a year for its 2008 crossover model. Standard Life Plc jumped 7 percent after saying a unit is buying Ignis Asset Management Ltd. from Phoenix Group Holdings. Lloyds Banking Group Plc slid the most since May 2012 as the U.K. government sold a stake in the lender.

The Stoxx 600 added 0.7 percent to 330.93 at the close of trading. The benchmark index has rallied 2 percent in the past two days, after falling 4 percent through March 24 as tension grew between the West and Russia over Ukraine. The measure is still heading for a 2.1 percent drop this month, its biggest monthly decline since June.

“The recovery from the losses that happened during this crisis is ongoing and more and more people are coming back to the market,” Soeren Steinert, who helps manage about $27 billion as associate director for equities trading at Quoniam Asset Management GmbH, said by phone from Frankfurt, referring to Ukraine. “America is strong and we see good macro numbers from there, so definitely the market sentiment has changed.”

Obama Speaks

U.S. President Barack Obama speaks today on what the standoff with Russia over Ukraine means for European security, as the former Soviet republic holds bailout talks with the International Monetary Fund. The U.S. and the European Union imposed sanctions on Russian officials and threatened more if President Vladimir Putin fails to ease the crisis.

In the U.S., Commerce Department data showed durable-goods orders rose 2.2 percent in February, beating economists’ forecasts for a 0.8 percent gain.

A gauge of German consumer confidence will remain at a seven-year high in April, Nuremberg-based GfK AG said today. The research company estimated that its index will hold at 8.5 next month, unchanged from March.

National benchmark indexes rose in 17 of the 18 western- European markets. France’s CAC 40 advanced 0.9 percent, Germany’s DAX jumped 1.2 percent, while the U.K.’s FTSE was little changed. The volume of shares changing hands in Stoxx 600 companies was 12 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.

Draghi Reiterates

President Mario Draghi late yesterday reiterated in a speech in Paris that the European Central Bank will act if necessary to safeguard the region’s economy. He also said the central bank’s accommodative monetary policy should become more effective within the euro-area economy as disruptions in the financial system dissipate, while warning that risks remain.

Peugeot added 2.8 percent to 13.02 euros. The carmaker got more than 120,000 orders in a year for its 2008 crossover model, while orders for its 308 vehicle stand at 65,000, La Tribune newspaper reported, citing an unidentified person at the company.

Volkswagen AG, Europe’s largest automaker, rose 1.4 percent to 183.55 euros. Bayerische Motoren Werke AG advanced 1.3 percent to 90.60 euros. A gauge of European auto stocks posted the best performance of the 19 industry groups on the Stoxx 600.

Standard Life jumped 7 percent to 400 pence, its highest price since May 30, after Scotland’s biggest insurer said its Standard Life Investments unit is buying Ignis Asset Management from Phoenix for 390 million pounds ($645 million). Phoenix rose 4.4 percent to 741.5 pence.

Airbus Gains

Airbus Group NV advanced 1.6 percent to 52.86 euros after Les Echos reported it is extending its partnership with Aviation Industry Corporation of China. The aircraft manufacturer and Avic plan to produce 1,000 EC175 helicopters over the next 20 years, according to the report, which didn’t cite anyone.

Mediaset SpA climbed 3.8 percent to 4.02 euros after the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi posted a return to profit for 2013. Net income last year totaled 8.9 million euros ($12.3 million) after a net loss in 2012. Sales fell 8.2 percent to 3.41 billion euros, compared with the 3.44 billion-euro average of analyst estimates compiled by Bloomberg.

William Hill Plc increased 2.8 percent to 348.7 pence. HSBC Holdings Plc upgraded the bookmaker to overweight, the equivalent of a buy rating, from underweight, saying that the prospect of further regulatory change has now been priced in to the shares, while its online operations are growing.

Ladbrokes Jumps

Ladbrokes Plc jumped 5.7 percent to 133.4 pence. The U.K. operator of more than 2,000 betting shops is the subject of bid speculation, according to the Daily Mail newspaper.

Lloyds slipped 4.9 percent to 75.2 pence. The U.K. government raised 4.2 billion pounds from selling shares at 75.5 pence apiece, according to U.K. Financial Investments Ltd., which manages the government’s investment in the lender. The shares were sold at a 4.6 percent discount to yesterday’s closing price. The sale reduces the government’s stake in Lloyds to less than 25 percent from 33 percent.

Neopost SA dropped 3.6 percent to 56.73 euros. The supplier of mail-room equipment forecast a decline in its 2014 operating margin to 22.5 percent-to-23.5 percent. Natixis said the guidance was disappointing as it fell below estimates for 23.7 percent.