In Europe: European Stocks Rise On Asian Economic Data; Vestas Gains

2 July 2012


Asian manufacturing data, Euro pact, give markets a boost to start the week.

European (SXXP) stocks rose, with the benchmark index extending its longest stretch of weekly gains since January, as better-than-forecast manufacturing data in Japan and China boosted optimism Asia will drive global growth. U.S. index futures fell, while Asian stocks advanced.

Vestas Wind Systems A/S jumped 2.2 percent after a report that it may put itself up for sale.Rhoen Klinikum AG (RHK) slumped 14 percent after Fresenius SE failed in its 3.1 billion-euro bid to buy the company.

The Stoxx Europe 600 Index climbed 0.2 percent to 251.66 at 8:13 a.m. in London. The gauge rallied 1.9 percent last week as the region’s leaders agreed to address flaws in their bailout programs to ease the sovereign-debt crisis. The measure trimmed its second-quarter decline to 4.6 percent after policy makers eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.

“This week is less about politics and rather about a renewed focus on central banks and economic data,” Chris Weston, an institutional trader at IG Markets in Melbourne, wrote in a note.

The European Central Bank and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark interest rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 57 economists. Five predict a cut of 50 basis points and 12 foresee no change.

Futures on the Standard & Poor’s 500 Index lost 0.3 percent, while the MSCI Asia Pacific Index added 0.3 percent.

Asian Manufacturing

In China, home prices advanced for the first time in 10 months and manufacturing indicators beat forecasts.

The government’s Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing reported yesterday. That beat the 49.9 median estimate in survey of 24 economists.

A separate PMI, compiled by HSBC Holdings Plc and Market Economics, posted a final reading of 48.2 in June compared with 48.4 in May, according to figures released today.

In Japan, large manufacturers became less pessimistic as declines in commodity prices aided profitability, boosting the outlook for the world’s third-biggest economy.

The quarterly Tankan index of sentiment was minus 1 in June from minus 4 in March, the Bank of Japan said today in Tokyo. The median estimate of 19 economists surveyed by Bloomberg News was for a reading of minus 4. A negative number means pessimists outnumber optimists.

U.S. Economy

In the U.S., a report at 10 a.m. may show that manufacturing probably expanded in June at the slowest pace in eight months, economists said.

The Institute for Supply Management’s factory index fell to 52 from 53.5 the prior month, according to the median estimate of 60 economists surveyed by Bloomberg News. Readings greater than 50 signal growth. Construction spending increased in May for a third month, separate figures may show.

Elsewhere, France will seek to raise as much as 8.3 billion euros through the sale of three-, six- and 12-month bills.

Vestas climbed 2.2 percent to 33.13 kroner. The company is considering putting itself up for sale after the company entered into debt restructuring talks with lenders, the Sunday Times reported, without saying where it got the information.

Failed Bid

Rhoen Klinikum plunged 14 percent to 16.25 euros after Fresenius failed in its bid to buy the hospital operator, foiled by rival Asklepios Kliniken GmbH. About 84 percent of Rhoen Klinikum shares were tendered in the offer, Bad Homburg, Germany-based Fresenius said in a statement after the market closed June 29.

Trading on June 27 triggered by Asklepios taking a 5 percent stake in Rhoen interfered with “acceptance and settlement” of the offer, Fresenius said. The 22.50-euro-a- share bid was contingent on winning at least 90 percent of Rhoen Klinikum stock.

Persimmon Plc (PSN) climbed 0.7 percent to 613 pence. The U.K.’s house prices stopped rising in June for the first time in four months as economic uncertainty and a seasonal slowdown curtailed activity in a market that now faces “downward pressure,” Hometrack Ltd. said.

Linde AG (LIN) fell 3 percent to 118.95 euros after agreeing to acquire Lincare Holdings Inc. for about $3.8 billion to add U.S. oxygen and respiratory therapy services delivered to the home.

Barclays Plc (BARC) dropped 1.1 percent to 164.7 pence. Chairman Marcus Agius resigned after the bank was fined a record 290 million pounds ($455 million) for trying to rig interest rates, sparking a political outcry. Agius, 65, will remain in post until his replacement is appointed. Michael Rake will become deputy chairman.

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