Frankfurt - European stocks extended a rally into a fifth day on investor speculation that the global economic recovery will strengthen and central banks have the will and firepower to support growth.
Greece’s Eurobank Ergasias SA and Alpha Bank AE jumped more than 12%, pushing lenders to the best performance of the 19 industry groups on the Stoxx Europe 600 Index. Antofagasta led miners higher as the price of copper rebounded. Gains were tempered by a slide on energy stocks, which posted the worst performance on the equity gauge as oil retreated.
The Stoxx 600 added 0.3% to 339.69 at 12:11, paring an earlier advance of as much as 0.9%. Greece’s ASE Index rose the most among western-European markets. The European equity benchmark closed above its 50-day moving average yesterday, capping its longest winning streak since October, as carmakers and miners jumped, while US manufacturing data beat forecasts.
“We’ve seen some macro data which at least didn’t disappoint,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf. “There is some anticipation among investors on a dovish ECB meeting. If there is no disappointment in the economic data this week then the current rebound could go further.”
US data will be in focus this week, with the Federal Reserve’s Beige Book and a separate release on non-farm payrolls in the spotlight for indications of the health of the world’s biggest economy. Investors also await direction on monetary policies later this month, with the European Central Bank scheduled to announced its decision on March 10, followed by the Fed on March 16.
Concern over global-growth prospects, the efficacy of central-bank stimulus, a deepening oil rout and bad loans at banks damped investor sentiment earlier this year, dragging the Stoxx 600 into a bear market. Since slumping to a 2013 low on February 11, it has rebounded 12% amid rallies in banks, automakers, miners and energy.
Among stocks moving on corporate news, MorphoSys AG climbed 7.1% after reporting better-than-estimated 2015 earnings. Virgin Money Holdings (UK) jumped 7.4% after posting a fourfold increase in pretax profit for last year. Amec Foster Wheeler gained 5.7% after the oil engineering company refinanced its debt.
Corbion NV gained 1.5% after reporting hither-than- expected revenue and saying it will buy back €50m of shares in 2016 and pay additional dividends totaling €25m.
Luxottica Group SpA slid 3.6% as Exane BNP Paribas noted that the Ray-Ban maker lowered its “rule of thumb” outlook for net income growth. Elekta AB tumbled 14% after the Swedish maker of medical devices reported earnings that missed estimates.
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