European Stocks Advance, Led by Philips; Asian Shares Decline
Oct. 12 (Bloomberg) -- European stocks advanced, with theDow Jones Stoxx 600 Index building on its biggest weekly gainsince July, as Royal Philips Electronics NV reported anunexpected profit. Asian shares fell.
Philips, Europe’s biggest consumer-electronics maker, rose7 percent after posting third-quarter earnings of 174 millioneuros ($255.9 million). Allied Irish Banks Plc climbed 4 percentafter Ireland’s Green Party backed a so-called bad bank.
Europe’s Stoxx 600 added 0.2 percent at 8:24 a.m. in Londonafter surging 3.7 percent last week. The gauge has rebounded 54percent since March 9 as companies from Bayer AG to Alcoa Inc.reported earnings that beat analysts’ estimates and the economiccontractions in Germany and France ended.
“Topline growth can support markets and even edge themfurther,” Kevin Gardiner, head of investment strategy forEurope, the Middle East and Africa at Barclays Wealth in London,said in a Bloomberg Television interview. “As economies moveaway from the recession, we’re going to see a rise in revenues.The story is growth is going to be restored over the next sixmonths.”
Earnings for companies in the Stoxx 600 may rise 3.7percent this year and 31 percent in 2010, according to analysts’estimates compiled by Bloomberg.
The MSCI Asia Pacific excluding Japan Index slipped 0.5percent, led by South Korean oil refiners on concern they’llreport weaker-than-estimated profits. Japanese markets areclosed today for a holiday.
Futures on the Standard & Poor’s 500 Index were littlechanged after the benchmark gauge for U.S. equities posted itsbiggest weekly rally since July last week.
Unexpected Profit
Philips surged 6.5 percent to 18.14 euros in Amsterdam. Thecompany posted a profit in the third quarter as operatingearnings at the consumer unit more than doubled. Analysts hadpredicted a loss of 44.7 million euros, according to 13estimates compiled by Bloomberg.
Allied Irish Banks rose 4.5 percent to 3.18 euros and Bankof Ireland Plc added 1.6 percent to 3.19 euros. Ireland’s GreenParty voted to stay in the nation’s governing coalition,averting a general election as the country’s so-called bad bankprepares to buy property loans to purge lenders of souringassets. Greens supported a government plan to pay 54 billioneuros for banks’ property loans.
Kantor, Rosenberg
There is still room for stocks to rise, according toBarclays Capital Inc.’s Larry Kantor, while David Rosenberg saysinvestors should buy bonds or seek dividends, because this isn’ta normal recovery.
Kantor, head of research at Barclays Capital in New York,was one of the first economists to call the end of therecession, in March. Barclays sees GDP expanding at a 4 percentrate now, 5 percent in the first quarter and 3.6 percent for2010. Rosenberg, the chief economist and strategist for Toronto-based Gluskin Sheff + Associates Inc., was among the first towarn of impending recession in 2006.
SK Energy Co. sank 9.9 percent to 113,500 won in Seoulafter Woori Investment & Securities Co. said oil refiners mayreport “earnings shocks.”
To contact the reporter on this story:Adria Cimino in Paris at acimino1@bloomberg.net.
Last Updated: October 12, 2009 03:27 EDTSource: Bloomberg
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