European stocks rise for fourth week, HSBC leads banks higher
Sunday, 9 August 2009
LONDON, Aug. 8 (Bloomberg): European stocks rose for a fourth week after the unemployment rate in the US economy unexpectedly fell in July and HSBC Holdings Plc posted a surprise profit.
British Land Co climbed 11 per cent, pacing gains among real estate companies, as the pace of US job losses slowed more than forecast last month and the unemployment rate dropped for the first time since April 2008. HSBC and Barclays Plc both jumped more than 9 per cent after income from their investment banking units doubled in the first half.
Europe's Dow Jones Stoxx 600 Index added 2.6 per cent to 230.68, its fourth straight weekly gain. The gauge has climbed 46 per cent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The regional measure is now valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
"Investors are continuing to buy into the market having missed some of the rally since the March lows," said Richard Hunter, London-based head of U.K. equities at Hargreaves Lansdown Stockbrokers. "Markets are now searching for the next positive catalyst to move things along."
ING Groep NV equity strategists raised financial-services shares and basic resources, chemical and industrial stocks to "overweight," as the brokerage shunned industries whose profits are less tied to economic growth.
"The short-term outlook remains dominated by the scale and timing of the quantitative easing supplied by central banks, the pace of recovery in equity markets and the speed with which credit markets and securitization markets return to whatever the 'new normal' is going to be," equity strategists led by London- based Simon Goodfellow wrote in a note to clients. "We have no crystal ball regarding these issues, but would suggest that momentum in all three categories is likely to remain positive over the next few months."
British Land Co climbed 11 per cent, pacing gains among real estate companies, as the pace of US job losses slowed more than forecast last month and the unemployment rate dropped for the first time since April 2008. HSBC and Barclays Plc both jumped more than 9 per cent after income from their investment banking units doubled in the first half.
Europe's Dow Jones Stoxx 600 Index added 2.6 per cent to 230.68, its fourth straight weekly gain. The gauge has climbed 46 per cent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The regional measure is now valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
"Investors are continuing to buy into the market having missed some of the rally since the March lows," said Richard Hunter, London-based head of U.K. equities at Hargreaves Lansdown Stockbrokers. "Markets are now searching for the next positive catalyst to move things along."
ING Groep NV equity strategists raised financial-services shares and basic resources, chemical and industrial stocks to "overweight," as the brokerage shunned industries whose profits are less tied to economic growth.
"The short-term outlook remains dominated by the scale and timing of the quantitative easing supplied by central banks, the pace of recovery in equity markets and the speed with which credit markets and securitization markets return to whatever the 'new normal' is going to be," equity strategists led by London- based Simon Goodfellow wrote in a note to clients. "We have no crystal ball regarding these issues, but would suggest that momentum in all three categories is likely to remain positive over the next few months."