EU stocks rise sec­ond day as air­line prof­its beat

The Pak Banker - - Front Page -


Euro­pean stocks climbed, ex­tend­ing yes­ter­day's big­gest rally in two weeks, as Air France-KLM Group and Deutsche Lufthansa AG posted earn­ings that beat es­ti­mates. US fu­tures and Asian shares also ad­vanced. A fi­nan­cial trader mon­i­tors data on com­puter screens at the Frankfurt Stock Ex­change in Frankfurt.

Air France-KLM and Lufthansa, Europe's two largest air­lines, both ral­lied more than 7 per­cent. Arcelor­Mit­tal de­clined 4.7 per­cent af­ter the world's big­gest steel­maker posted its low­est quar­terly profit in al­most three years. An­heuserBusch In­Bev NV also fell.

The Stoxx Europe 600 In­dex added 0.2 per­cent to 272.41 at 8:53 a.m. in Lon­don, af­ter ral­ly­ing 0.9 per­cent yes­ter­day. Stan­dard & Poor's 500 In­dex fu­tures gained 0.6 per­cent as US eq­uity mar­kets re­open af­ter a two-day shut­down from Hur­ri­cane Sandy. The MSCI Asia Pa­cific In­dex ad­vanced 0.8 per­cent.

Euro­pean stocks ral­lied the most in two weeks yes­ter­day as com­pa­nies from BP Plc to Deutsche Bank AG re­ported earn­ings that topped es­ti­mates and eco­nomic data showed an in­crease in U.S. house prices. Asian shares ex­tended the rally to­day af­ter South Korea's in­dus­trial pro­duc­tion ex­panded.

Trad­ing vol­umes across Europe were lower for the past two days fol­low­ing the long­est weather-re­lated shut­down of U.S. eq­uity mar­kets in more than a cen­tury. The num­ber of shares chang­ing hands in com­pa­nies listed on the Stoxx Europe 600 In­dex has been at least 40 per­cent lower than the 30-day av­er­age, ac­cord­ing to data Euro-area fi­nance chiefs will try to get Greece's bailout plan back on track to­day as of­fi­cials split on whether the coun­try needs an­other debt write­down and Greek politi­cians squab­ble over fur­ther aus­ter­ity mea­sures.

With re­ces­sion bit­ing, pol­icy mak­ers are again seek­ing ways to keep Greece in the euro and avert an exit. Fi­nance min- is­ters will hold a con­fer­ence call at 12:30 p.m. Brussels time and may re­lease a state­ment after­wards.

Air France-KLM jumped 7.3 per­cent to 6.38 eu­ros. Europe's largest air­line to­day re­ported a 27 per­cent in­crease in third- quar­ter oper­at­ing profit to 506 mil­lion eu­ros ($656 mil­lion) as job cuts and im­proved sum­mer traf­fic off­set higher fuel costs.

An­a­lysts had pre­dicted earn­ings of 434 mil­lion eu­ros, based on the av­er­age of nine es­ti­mates. Lufthansa added 7.4 per­cent to 11.80 eu­ros. Europe's sec­ond-largest air­line re­ported a 6.2 per­cent in­crease in thirdquar­ter oper­at­ing profit to 648 mil­lion eu­ros as a cost-sav­ings pro­gram helped boost earn­ings. An­a­lysts had pre­dicted earn­ings of 522 mil­lion eu­ros, based on nine es­ti­mates.

Arcelor­Mit­tal (MT) lost 4.7 per­cent to 11.64 eu­ros af­ter it said earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion dropped to $1.34 bil­lion from $2.41 bil­lion a year ear­lier. That's in line with the $1.3 bil­lion me­dian es­ti­mate of 17 an­a­lysts sur­veyed by Bloomberg. Full-year Ebitda will be about $7 bil­lion, the steel­maker said.

AB In­Bev de­clined 1 per­cent to 65.62 eu­ros even af­ter the brewer re­ported a 9.1 per­cent in­crease in to­tal or­ganic sales, boosted by higher prices in the U.S. and in Brazil. That topped the me­dian an­a­lyst es­ti­mate of 7.5 per­cent, the com­pany said to­day in a state­ment. Or­ganic vol­ume, which ex­cludes ac­qui­si­tions and dis­pos­als, fell 0.3 per­cent. That missed the me­dian es­ti­mate of six an­a­lysts for a 2 per­cent in­crease.

Bar­clays slid 4.5 per­cent to 228 pence. The bank to­day re­ported a 29 per­cent rise in third-quar­ter pre­tax profit to 1.73 bil­lion pounds ($2.8 bil­lion), as rev­enue from the fixed- in­come arm of its se­cu­ri­ties unit in­creased. That com­pares to the 1.71 bil­lion-pound me­dian es­ti­mate of 13 an­a­lysts sur­veyed by Bloomberg. The stock ral­lied 3.4 per­cent yes­ter­day.

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