Europe Stocks Rise Amid ECB Stimulus Bets, German Factory Orders

By Inyoung Hwang

European stocks rose, rebounding from their biggest drop in seven weeks, amid speculation the European Central Bank will consider quantitative easing at its January meeting, and after German factory orders beat forecasts.
The Stoxx Europe 600 Index climbed 1.1 percent to 348.51 at 10:50 a.m. in London. The benchmark gauge, which is heading for its fourth weekly advance, slid yesterday after ECB President Mario Draghi refrained from pledging QE for the euro area at the Governing Council meeting. Draghi said the ECB will reassess the situation early next year.
The council expects to consider a proposal for broad-based asset purchases including sovereign debt at the next monetary-policy meeting on Jan. 22, according to two euro-area central-bank officials familiar with the deliberations.
“European markets are liquidity-addicts at the moment,” Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich, said by
telephone. “You get rallies whenever somebody eases in the world. The bounce back has been in part due to slightly better economic trends in Europe. We had fears in the market of a possible recession in Germany and they avoided recession so the euro zone looks better.”
Investors are also watching economic reports from the euro area and U.S. to gauge the strength of both economies.
German factory orders, adjusted for seasonal swings and inflation, climbed 2.5 percent after a revised increase of 1.1 percent in September, data from the Economy Ministry in Berlin showed today. Economists had predicted a 0.5 percent increase.

Euro GDP

Euro-area gross domestic product increased 0.2 percent in the three months through September, matching an initial estimate published last month, Eurostat, the European Union’s statistics office in Luxembourg, said today.
Data at 8:30 a.m. in Washington may show U.S. employers added 230,000 jobs last month, after payrolls increased by 214,000 in October, according to economist forecasts. A separate report will probably show factory orders were unchanged in October after falling 0.6 percent the prior month. Standard & Poor’s 500 Index futures gained 0.1 percent today.
Gauges of automakers and telecommunications companies were among the biggest advancers of the 19 industry groups in the Stoxx 600. Daimler AG rose 2 percent and Peugeot SA added 2.3 percent.
Vodafone Group Plc climbed 2.4 percent after Goldman Sachs Group Inc. upgraded the shares to buy from neutral, saying Europe’s largest mobile operator will benefit from mergers and acquisitions activity in the sector. The company is considering a combination with Liberty Global Plc, people familiar with the matter said on Dec. 1.

Banks Advance

HSBC Holdings Plc contributed the most to a gain in an index of banking stocks, rising 1 percent. Banco Santander SA added 1.6 percent.
Berkeley Group Holdings Plc advanced 4.5 percent. Revenue in the first half of the fiscal year rose to 1.02 billion pounds ($1.6 billion) from 821 million pounds, and the property developer said it is on course to meet its dividend target.
United Internet AG rose 2.4 percent after Goldman Sachs Group Inc. recommended investors buy shares of the Web-access provider, citing strong data-volume growth in Germany.
Intertek Group Plc climbed 3.4 percent. Deutsche Bank AG raised its rating on the product-inspection company to buy, saying the recent decline in shares due to the plunge in oil prices has created an investment opportunity. Intertek slid 14 percent in November.
Enel Green Power SpA declined 2.4 percent after Kepler Cheuvreux SA removed the Italian renewable energy developer from its European utilities list, citing lower estimates for power prices.