European Stocks Gain as Sainsbury, BT Climb; Asian Shares Rally
By Sarah Jones
May 13 (Bloomberg) -- European stocks rose for a second day after companies from J Sainsbury Plc to BT Group Plc reported better-than-estimated earnings and Vallourec SA boosted its profit outlook. Asian shares advanced.
Sainsbury rose 2.8 percent after the supermarket chain more than doubled profit. BT, the U.K.’s largest phone company, surged the most since July. Vallourec SA, a French producer of steel pipes, jumped to a 20-month high. SAP AG lost 2.2 percent after the world’s biggest maker of business-management software agreed to buy Sybase Inc. for $5.8 billion.
The benchmark Stoxx Europe 600 Index rose 0.4 percent to 257.51 at 12:01 p.m. in London. The gauge pared earlier gains of as much as 0.8 percent as the euro fell against the dollar on concern governments may not cut their budget deficits fast enough after the European Union unveiled a near $1 trillion bailout for the region’s most indebted nations.
There is a “good fundamental backdrop that is producing the earnings that we are now seeing,” Mike Lenhoff, who helps oversee about $35.5 billion as chief strategist at Brewin Dolphin Securities Ltd. in London, said in a Bloomberg Television interview. “It’s coming through in terms of top-line growth and it is one of the reasons that markets are now responding as they are.”
Asian, U.S. Shares
In Asia, the benchmark MSCI Asia Pacific Index jumped 1.9 percent, led by computer-related companies after earnings from Tokyo Electron Ltd. to Tencent Holdings Ltd. boosted confidence in the industry. Futures on the Standard & Poor’s 500 Index were little changed before a report on U.S. jobless claims.
Markets are closed in Scandinavia, Austria, Switzerland and Luxembourg today for the Ascension Day holiday.
Sainsbury climbed 2.8 percent to 337.1 pence after the U.K.’s third-largest supermarket chain said profit more than doubled to 585 million pounds ($870 million) as it added convenience stores to win shoppers and attributed a higher value to its property assets.
Pretax profit, excluding one-time gains and losses, increased 18 percent to 610 million pounds, beating the median 598 million-pound estimate in a Bloomberg survey of analysts.
BT soared 10 percent to 132.5 pence, the biggest intraday jump since July 30. The phone company said fourth-quarter operating profit rose 16 percent to 1.53 billion pounds, boosted by job cuts. Operating profit had been estimated at 1.44 billion pounds on revenue of 5.17 billion pounds, according to a Bloomberg survey.
Vallourec Gains
Vallourec rallied 6.1 percent to 161.05 euros, on course for the highest close since September 2008. The company said first-half sales and earnings before interest, tax, depreciation and amortization would be “slightly below” the result for the second half of 2009 after previously saying they would be “significantly lower.”
The company is indicating “a strong rebound in the second quarter due to high activity in the U.S. oil and gas and non- energy markets,” Jeffrey Largey, an analyst at JPMorgan Chase & Co., wrote in a research report to investors today. The outlook is a “positive revision to the previous guidance,” he said.
SAP dropped 2.2 percent to 35.25 euros after agreeing to acquire Sybase to help it fend off competition from Oracle Corp.
Sybase shareholders will receive $65 a share, 56 percent higher than the closing price of $41.57 on May 11, before the deal discussions became public. Sybase, the maker of the Sybase IQ database management software, soared 35 percent yesterday in New York.
DSG, 3i
DSG International Plc advanced 6.7 percent to 30.2 pence, the most since November, after the owner of Currys and PC World stores reported an 8 percent gain in underlying group sales. The company also said it has a new revolving credit facility.
3i Group Plc soared 7.2 percent to 287.6 pence after Europe’s largest publicly traded private-equity firm reported a greater-than-estimated increase in value of its holdings. Net asset value per share climbed to 321 pence at the end of March from 279 pence a year earlier.
Credit Agricole SA declined 2.4 percent to 10.41 euros. France’s largest bank by branches reported first-quarter net income of 470 million euros, missing the median estimate of 511 million euros in a Bloomberg survey.
A U.S. Labor Department report at 8:30 a.m. in Washington may show initial claims for jobless benefits fell by 4,000 last week to 440,000, according to a Bloomberg survey of economists.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
Last Updated: May 13, 2010 07:03 EDT
