European, Asian Stocks Advance; BHP Billiton, Societe Generale ...
Oct. 6 (Bloomberg) -- European and Asian stocks gained ashigher commodities lifted metal producers, while financialshares advanced after BofA Merrill Lynch Global Researchrecommended European banks.
BHP Billiton Ltd., the world’s biggest mining company,climbed for a second day in London as copper increased. SocieteGenerale SA, France’s second-largest bank by market value,fluctuated after saying it aims to raise 4.8 billion euros ($7.1billion) and is in talks to purchase Dexia SA’s 20 percent stakein Credit du Nord. Dexia added 2.2 percent.
The Dow Jones Stoxx 600 Index gained 0.4 percent to 237.11at 8:19 a.m. in London, while futures on the Standard & Poor’s500 Index rose 0.2 percent. The benchmark gauges for Europe andthe U.S. rebounded yesterday as a report showed American serviceindustries returned to growth after 11 months of contraction.
Stocks had dropped for two weeks as data on U.S.unemployment, manufacturing and consumer confidence missedeconomists’ forecasts, fueling concern that the global economicrecovery may not be robust.
The MSCI Asia Pacific Index advanced for the first time infour days today, adding 1.2 percent. Shares in Australia paredearlier gains as the country’s central bank unexpectedly raisedits benchmark interest rate from a 49-year low and signaledfurther increases in coming months.
BHP added 1.5 percent to 1,683 pence, while Rio TintoGroup, the world’s third-biggest mining company, gained 2.6percent to 2,631.5. Copper, lead, nickel and tin advanced on theLondon Metal Exchange.
Societe Generale, Dexia
Societe Generale gained as much as 2.3 percent to 53.41euros and lost as much as 2.3 percent. The lender said it willrepay 3.4 billion euros to the government with its rights offer.Shareholders can buy two new shares for every nine held at 36euros each, or 31 percent less than yesterday’s closing price.
The French bank is also in discussions to buy Dexia’s stakein Credit du Nord, a French retail bank it controls, and aims toconclude the talks by the end of the year. Dexia gained 2.2percent to 6.07 euros.
Steps identified so far by Societe Generale will have apositive impact on gross operating profit of 430 million eurosin 2009 and 1 billion euros in 2010, the bank said. SocieteGenerale said that it will pay out between 35 percent and 40percent of net income as dividends.
European banks were raised to “overweight” at BofAMerrill Lynch Global Research, which said “with further EPSupgrades ahead reasonable valuations offer the potential for re-rating.”
Adidas, Tesco
The European luxury-goods industry was upgraded to“neutral” from “bearish” at Nomura Holdings Inc., which said“although the decline in luxury sales has been particularlypronounced and sudden, trends appear to be stabilizing.”
The brokerage lifted Adidas AG to “buy” from “reduce.”Adidas, the world’s second-largest sporting-goods maker, added2.4 percent to 35.89 euros.
Tesco slipped 1.1 percent to 387 pence. The world’s third-biggest retailer said first-half net profit was 1.03 billionpounds ($1.64 billion), compared with analysts’ estimates forprofit on that basis of 1.04 billion pounds.
Alcoa Inc. kicks off the U.S. third-quarter earnings seasontomorrow, while companies including Banco Espanol de Credito SAreport in Europe this week.
Nobel Prize-winning economist Joseph Stiglitz said U.S.unemployment will keep rising and should be the focus for policymakers, and gains in the stock market show investors have been“irrationally exuberant” about a recovery.
“There’s a lot of risk going ahead of some big bumps,” hesaid yesterday in a Bloomberg Television interview fromIstanbul, citing housing, commercial real estate and consumers’inability to pay off credit cards because of job losses.“There’s a very big risk that markets have been irrationallyexuberant.”
To contact the reporter on this story:Adria Cimino in Paris at acimino1@bloomberg.net.
Last Updated: October 6, 2009 03:26 EDTSource: Bloomberg
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