BL: Stocks in Europe, Asia, U.S. Futures Rise; Mizuho, Danone Gain
By Andreas Hippin
Feb. 14 (Bloomberg) -- Stocks rallied around the world as Japan's economy grew faster than forecast and companies from Groupe Danone SA to Cap Gemini SA reported earnings that beat analyst estimates. The Nikkei 225 Stock Average had its biggest gain in six years and U.S. index futures increased.
Mizuho Financial Group Inc. climbed in Tokyo for the first time in seven days. Danone, the world's largest yogurt maker, and Cap Gemini rallied more than 3 percent in Europe. Diageo Plc rose to the highest this year after the biggest liquor maker reported an 8.9 percent gain in first-half profit.
The MSCI World Index added 0.9 percent to 1,458.37 at 12:20 p.m. in London, and Japan's Nikkei jumped 4.3 percent, the most since March 2002. Futures on the Standard & Poor's 500 Index rose 0.3 percent. Europe's Dow Jones Stoxx 600 Index gained 0.7 percent, after climbing as much as 1.3 percent.
``Stocks are rallying on hopes the economy and corporate earnings are weathering the storm,'' said Juergen Lukasser, who helps manage the equivalent of about $20 billion as head of equities at Constantia Privatbank AG in Vienna. ``We may not be out of the woods yet with subprime.''
Japan's economy grew 3.7 percent last quarter, twice the pace economists forecast, as exports to Asia helped companies weather the U.S. slowdown. Shares in the U.S. rallied yesterday following an unexpected rise in retail sales.
`Back to Normal'
``People feel the world's getting back to normal,'' said Heino Ruland, an equity strategist at FrankfurtFinanz Partner in Frankfurt. ``The Japanese economy grew faster than expected, while higher U.S. retail sales eased concern the world's biggest economy is sliding into a recession.''
UBS AG tumbled more than 5 percent on concern Europe's largest bank by assets may have more losses after posting $13.7 billion in writedowns related to subprime mortgages. Renault SA retreated after France's second-largest carmaker said it would reduce production of the mid-sized Laguna to trim stockpiles.
The MSCI Asia Pacific Index added 3.8 percent, its steepest advance since Jan. 25. Hong Kong's Hang Seng Index climbed 3.7 percent.
Mizuho, Japan's third-largest publicly traded bank by market value, added 4.2 percent to 443,000 yen, halting a six-day, 14 percent drop. Sumitomo Mitsui Financial Group Inc., the second- biggest, rose 3 percent to 785,000 yen.
Li & Fung Ltd., which sells goods to Wal-Mart Stores Inc., advanced 3.6 percent to HK$28.70.
National benchmarks advanced in all 18 markets in western Europe except Iceland. Germany's DAX added 0.6 percent, while France's CAC 40 increased 0.9 percent. The U.K.'s FTSE 100 climbed 0.4 percent.
Danone
Danone climbed 3.7 percent to 56 euros. The Evian bottler that bought baby-food maker Royal Numico NV last year said annual profit tripled to 4.18 billion euros ($6.11 billion) on the sale of its cookie unit to Kraft Foods Inc. That beat the 3.25 billion euros estimated by 17 analysts in a Bloomberg survey.
Earnings disappointments from companies including GlaxoSmithKline Plc and Infineon Technologies AG led analysts to cut profit growth estimates for members in the Stoxx 600 Index to 8.6 percent from 10.3 percent in the last two weeks, according to data compiled by Bloomberg.
``Looking at earnings, the future is getting more predictable and doesn't look that bad,'' said Wolfgang Matejka, who oversees $3 billion as chief investment officer at Vienna- based Meinl Bank AG, in a Bloomberg Television interview. ``Many investors wonder whether it's time to re-enter the market. Now it's sell the rumor, buy the fact.''
Beating Forecast
Shares were also buoyed today by an economic report that showed growth in the European Union slowed less than economists forecast. The risk of European companies defaulting fell, according to traders of credit-default swaps. European government bonds declined for a fourth day.
Cap Gemini climbed 8.3 percent to 37.15 euros. Europe's largest computer-services company said 2007 profit jumped 50 percent to 440 million euros, spurred by its acquisition of Kanbay International Inc. and lower financing costs.
Analysts had predicted profit of 393 million euros, the average of 11 estimates compiled by Bloomberg.
Diageo rose 4.7 percent to 1,083 pence. Net income was 975 million pounds ($1.9 billion) in the six months through December. That beat the 971 million-pound average of seven analysts' estimates compiled by Bloomberg. Sales of spirits in North America climbed 8 percent.
Writedowns Likely
UBS fell 5.5 percent to 38.6 francs after posting the biggest-ever loss by a bank in the fourth quarter. Europe's largest bank by assets had a net loss of 12.5 billion francs ($11.3 billion), compared with a profit of 3.4 billion francs a year earlier, the Zurich-based company said. UBS reported on Jan. 30 a preliminary loss of about 12.5 billion francs for the period, after increasing writedowns.
``Further writedowns are likely in at least the first quarter, further impairing confidence and raising the risk of market share losses'' at UBS, said Deutsche Bank AG analyst Matt Spick in a note today. He lowered his recommendation on the stock to ``hold'' from ``buy.''
Renault fell 4.1 percent to 71.5 euros. The carmaker is reducing production of the new Laguna mid-sized hatchback to trim stockpiles after sales were hurt by environmental taxes on larger cars in France and Spain, Chief Executive Officer Carlos Ghosn said. He declined to give details of the production cuts.
IKB Bailout
IKB Deutsche Industriebank AG surged 13 percent to 6.60 euros. The German bank reeling from U.S. subprime investments will receive a 1.5 billion-euro bailout led by the German government.
Zurich Financial Services AG jumped 6.7 percent 324 francs. The largest Swiss insurer said full-year profit rose 22 percent to a record $5.63 billion on premium gains and higher income at its biggest divisions. That beat the $5.4 billion median estimate of 11 analysts.
The insurer also said it would buy back up to 2.2 billion Swiss francs of shares this year.
Lafarge SA jumped 3.3 percent to 115.2 euros. The world's biggest cement maker said fourth-quarter profit increased 36 percent to 375 million euros, driven by construction growth in China and other emerging markets. Analysts in a Bloomberg survey had predicted 356 million euros.
ABB, Clariant
ABB Ltd. rose 2.2 percent to 26.6 francs. The Swiss engineering company whose chief executive officer left yesterday over a strategy clash forecast sales growth of as much as 20 percent for its power-related business this year as markets remain ``buoyant.''
Its automation unit should increase revenue by about 10 percent, ABB, the world's biggest maker of power networks, said today in an e-mailed statement.
Clariant AG, the world's second-largest specialty chemicals maker, rose 15 percent to 9.67 francs, the steepest gain in the Stoxx 600 today, after reporting a fourth-quarter loss that was smaller than analysts estimated.
To contact the reporter on this story: Andreas Hippin in Frankfurt at ahippin@bloomberg.net .
Last Updated: February 14, 2008 07:44 EST
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