Europe Stocks Climb Amid Bets ECB Will Expand Stimulus Measures

By Sofia Horta e Costa  

A gain in healthcare companies helped push European stocks close to a six-year high, amid bets that the European Central Bank will expand stimulus.
The Stoxx Europe 600 Index added 0.3 percent to 348.28 at 8:58 a.m. in London, taking it to within 0.4 percent of its high reached in June. Novartis AG added 1.4 percent, leading a gauge of healthcare stocks to a record. Standard & Poor’s 500 Index futures fell 0.1 percent today. The MSCI Asia Pacific Index slipped 0.2 percent.
“Everyone wants Draghi to leave the option for QE out in the open,” said Carsten Hilck, who oversees $4 billion at Union Investment Privatfonds GmbH in Frankfurt. “He just has to show the gun, but not yet use it. Money is flowing back into European stocks, markets are near their highs, bond yields are going down -- everything is back on track now.”
The European equity benchmark has rallied 12 percent from
an October low as President Mario Draghi said the ECB may broaden its asset-buying program to include government bonds, while central banks in Japan and China boosted measures to support their economies.
Draghi and his ECB colleagues meet tomorrow in Frankfurt to discuss monetary policy. Speculation that the central bank may move a step closer to full-scale quantitative easing has spurred investors to send money to a fund tracking the region’s equities for the first time in five months.

U.S. Data

Investors are also watching U.S. data to gauge whether the world’s largest economy can lead a global rebound. A report from the ADP Research Institute at 8:15 a.m. New York time may show U.S. companies added fewer workers in November, while a release at 10 a.m. in Washington will probably show service industries expanded at a faster pace last month, economists predicted.
The Fed will release its Beige Book after the close of European markets today. The survey, based on reports from it 12 regional banks, will provide anecdotal information about the economy before the Fed’s Dec. 16-17 policy meeting.
A gauge of healthcare companies jumped 0.8 percent, contributing the most to gains on the Stoxx 600. Novartis rose as Morgan Stanley upgraded its rating on the drugmaker to the equivalent of neutral from a rating similar to sell. Novo Nordisk A/S added 1.6 percent for a sixth day of gains, while MorphoSys AG jumped 3.5 percent to a 14-year high.
Telenor ASA climbed 1.8 percent and TeliaSonera AB gained 1.7 percent after the phone carriers agreed to combine their Danish businesses. Copenhagen-based rival TDC A/S jumped 5.7 percent, the biggest gain in more than three years.
Salzgitter AG advanced 3.2 percent after the steelmaker said insurance policies will cover most losses linked to Russia’s discontinuation of its Black Sea pipeline project.

Stake Sales

Among other stocks moving on corporate news, some were active on stake sales. ISS A/S, the world’s largest cleaning company, slipped 2.1 percent after saying its biggest shareholder sold 25 million shares. Nexity SA, the French real-estate services company, declined 2.8 percent as Groupe BPCE sold a 4 percent stake. Just Eat Plc slumped 8.5 percent as investors offered to sell an 8 percent stake in the online food-takeaway company.
British housing stocks and financial companies might move later today. In a speech to Parliament from 12:30 p.m. in London, U.K. Chancellor of the Exchequer George Osborne will set out planned changes to taxation and spending, as well as announcing new forecasts for growth.