European Stocks Gain on jpmorgan Earnings; BNP Paribas Climbs
July 16 (Bloomberg) -- European stocks advanced, sendingthe Dow Jones Stoxx 600 Index higher for a fourth day, afterJPMorgan Chase & Co. reported better-than-estimated earnings andeconomic growth in China accelerated.
BNP Paribas SA and Societe Generale SA climbed more than1.7 percent after JPMorgan’s profit increased for the first timesince 2007. Electrolux AB jumped 9.2 percent after postingresults that beat analysts’ expectations. Nokia Oyj, the world’sbiggest maker of mobile phones, slumped the most in five yearsafter cutting its forecasts for market share and profitability.
The Stoxx 600 added 0.4 percent to 209.86, the highestlevel since June 12. The measure has climbed 6.4 percent sinceJuly 10, heading for the steepest weekly rally this year, afterU.S. companies from Goldman Sachs Group Inc. to Johnson &Johnson reported earnings that beat analysts’ estimates.
“Investors went into the earnings season with very lowexpectations and are happy to see that the world is not fallingapart and that JPMorgan delivered stunning results,” saidMatthias Joerss, head of equity strategy at Sal. Oppenheim Jr. &Cie. in Frankfurt. “Good banks can earn lots of money in thismarket.”
The VStoxx Index, which gauges the price paid for optionsto protect against declines in the Euro Stoxx 50, retreated 3.2percent to 26.88, the lowest level since Sept. 9, six daysbefore Lehman Brothers Holdings Inc. collapsed.
Earnings per share have fallen 18 percent on average forthe 27 companies in the Standard & Poor’s 500 Index that havereported second-quarter earnings, according to data compiled byBloomberg. That compares with a 32 percent drop in the firstquarter and a 56 percent slump in the final period of 2008.
National Indexes
National benchmark indexes rose in 14 of the 18 westernEuropean markets. The U.K.’s FTSE 100 added 0.4 percent andFrance’s CAC 40 climbed 0.9 percent. Germany’s DAX advanced 0.6percent as Infineon Technologies AG rallied.
China’s gross domestic product grew 7.9 percent in thesecond quarter as the nation became the first of the majoreconomies to rebound from the global recession. The figureannounced by the statistics bureau in Beijing exceeded the 7.8percent median forecast of 20 economists in a Bloomberg surveyand a 6.1 percent gain in the first quarter that was the slowestin almost a decade.
“Asia is a big driver of growth at the moment,”Oppenheim’s Joerss said. “China’s huge growth of money supplyindicates that, at least for the near term, growth there willremain strong.”
Banks Climb
BNP Paribas, France’s largest bank, climbed 1.7 percent to49.17 euros. Societe Generale, the second-biggest, advanced 3.2percent to 42.05 euros.
JPMorgan, the second-largest U.S. bank, said second-quarterearnings increased 36 percent to $2.7 billion, or 28 cents ashare. The average profit estimate of 14 analysts surveyed byBloomberg was 5 cents a share, including costs to repaygovernment bailout funds and an assessment by the FederalDeposit Insurance Corp.
Jyske Bank A/S, Denmark’s second-biggest lender, jumped 10percent to 162.50 kroner after raising its 2009 profit forecast.Full-year core earnings before loan impairment charges andprovisions for guarantees will be 2.7 billion kroner ($511million), or 300 million kroner more than previously predicted,Jyske Bank said.
Electrolux, Infineon
Electrolux surged 9.2 percent to 127.50 kronor. The world’ssecond-largest appliance maker said second-quarter net incomerose to 658 million kronor from 99 million kronor a yearearlier. Analysts had estimated net income of 140 millionkronor, according to a survey compiled by Bloomberg.
Infineon rallied 12 percent to 3.50 euros as Europe’ssecond-biggest chipmaker said quarter-on-quarter sales gained.Bafin, the German financial markets regulator, also approved itsprospectus to issue as many as 337 million shares.
Petrofac Ltd. advanced 5.3 percent to 730.5 pence after ajoint venture including the U.K. oil-services provider won a$2.1 billion contract from Abu Dhabi Gas Industries Ltd.
A gauge of technology shares on the Stoxx 600 slumped 4.7percent, the steepest decline in six months.
Nokia plummeted 15 percent to 9.47 euros, the biggest dropsince April 2004. The company said its market share will belittle changed this year, having previously forecast anincrease. Nokia also predicted a second-half non-IFRS operatingmargin in the main devices and services unit at about the samelevel as in the first half.
Autonomy Slides
Autonomy Corp. slumped 8.6 percent to 1,205 pence. TheU.K.’s second-biggest software maker said second-quarter netincome rose 67 percent as regulation changes and lawsuitsspurred demand for its database-search software. Some analystssaid deferred revenue was weaker than predicted.
“In our view the headline results will cause weakness inthe shares, in particular the weak headline deferred revenues,”Goldman Sachs analysts including Mohammed Moawalla and SivaKrishna Prasad Borra wrote in a report today.
To contact the reporter on this story:Adria Cimino in Paris at acimino1@bloomberg.net.
Last Updated: July 16, 2009 12:41 EDTSource: Bloomberg
