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Re: Stock Lobster post# 309998

Tuesday, 03/23/2010 9:07:09 AM

Tuesday, March 23, 2010 9:07:09 AM

Post# of 648882
BL: European Stocks Advance; Legal & General, Cairn Energy Surge

By Sarah Jones

March 23 (Bloomberg) -- European stocks rose for the first time in four days as Bank of China Ltd. reported earnings that beat analysts’ estimates. Most Asian shares gained and U.S. index futures were little changed.

Legal & General Group Plc surged 5.1 percent after the insurer posted a full-year profit and boosted its dividend. Cairn Energy Plc rallied 9.3 percent after the operator of India’s biggest onshore oil field announced the start of drilling in Greenland and raised output forecasts in Rajasthan. Volkswagen AG limited gains in European stocks after the region’s largest carmaker announced a sale of preferred shares.

The Stoxx Europe 600 Index rose 0.4 percent to 261.11 at 12:38 p.m. in London. The gauge extended its advance after Bank of China, the nation’s third-largest lender by market value, posted a more than fourfold increase in fourth-quarter net income to 18.9 billion yuan ($2.8 billion).

“The market just wants to continue to move higher,” said Mike Lenhoff, who helps oversee about $35.5 billion as chief strategist at Brewin Dolphin Securities Ltd. in London. “We have a very fertile backdrop for equity markets at the moment. We are getting decent corporate news flow with numbers that, in many cases, are better than expected.”

Three Straight Weeks

The Stoxx 600 has advanced for three straight weeks amid optimism the European Union will help Greece rein in Europe’s biggest budget deficit and as the Federal Reserve pledged to maintain record-low borrowing costs for an extended period. The benchmark gauge for European equities has surged 66 percent since March last year.

Futures on the Standard & Poor’s 500 Index slipped less than 0.1 percent today before a report on home sales. The MSCI Asia Pacific Index rose 0.1 percent as Australia & New Zealand Banking Group Ltd. unveiled expansion plans.

Legal & General climbed 5.1 percent to 85.45 pence after posting 2009 net income of 863 million pounds ($1.3 billion) as investment returns increased. That beat the 461 million-pound median estimate in a Bloomberg survey. The U.K.’s fourth-biggest insurer also increased its dividend by 33 percent to 2.73 pence a share.

Cairn Energy jumped 9.3 percent to 413.9 pence, the highest level since at least 1989. The company said two drilling rigs will begin a four-well offshore exploration program in the summer of 2010. Cairn is targeting about 1.6 billion barrels of risked oil-in-place reserves and 385 million barrels of risked resources.

VW Declines

Volkswagen preferred stock dropped 5 percent to 69.34 euros after the automaker said it will sell as many as 65 million new shares to help finance the takeover of Porsche SE’s auto-making unit. The offer price, subscription ratio and the final offer volume will be decided by March 26.

VT Group Plc jumped 5.1 percent to 725 pence, the highest level since at least 1991, after the government-services company agreed to be bought by Babcock International Group Plc for 1.3 billion pounds. Babcock rallied 5.3 percent to 560.5 pence.

“Strategically and financially the acquisition is in our view a great deal for the shareholders of both entities,” said Howard Wheeldon, a London-based strategist at BGC Partners. The acquisition “will produce growth and potentially excellent future bottom line results.”

GKN, Magna

GKN Plc climbed 4.7 percent to 137.1 pence on speculation Magna International Inc. may bid for the U.K. maker of aircraft components. The London-based Times said speculation involving the two companies was “reheated.”

“Maybe there’s some money going into the shares on the back of that story,” said John Buckland, an analyst at MF Global UK Ltd. in London. He has a “buy” recommendation on the stock.

Opap SA rallied 8.2 percent to 16.40 euros, leading a measure of travel and leisure shares to the second-biggest gain among 19 industry groups in the Stoxx 600. Europe’s largest publicly traded gambling company reported fourth-quarter net income of 92.1 million ($124 million), beating analysts’ estimates.

British Airways Plc rose 2.9 percent to 247.9 pence. Europe’s third-biggest airline said its profit outlook is “broadly” unchanged after the industrial action of the past three days. The carrier said the strike over pay and staffing levels cost about 7 million pounds a day.

Saipem SpA, Europe’s largest oil-services provider, gained 3.1 percent to 28.54 euros and Technip SA, the second-biggest, climbed 5.9 percent to 61.34 euros after Morgan Stanley upgraded both companies to “overweight” from “equal weight.”

Tecnicas Reunidas SA surged 4.4 percent to 46.35 euros after Morgan Stanley rated the engineering and construction- services company “overweight” in new coverage.

Sales of existing U.S. homes probably fell in February by 1.1 percent to a 5 million annual rate, the lowest level in eight months, according to a Bloomberg survey of economists. December and January showed the two biggest declines on record. The National Association of Realtors’ report is due at 10 a.m. in Washington.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: March 23, 2010 08:39 EDT

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