European Stocks Rise as Energy Shares Rebound Before ECB Meeting

By Jonathan Morgan

European stocks rose, as energy shares rebounded from six days of losses, and optimism grew over stimulus prospects before the European Central Bank meets later this week.
The Stoxx Europe 600 Index added 0.4 percent to 347.07 at 11:06 a.m. in London, paring earlier gains of as much as 1 percent. Oil and gas stocks ended their longest losing streak in almost 18 months. The Stoxx 600 lost 0.5 percent yesterday as factory indexes fell in China and Europe, stoking concern about slowing inflation and global growth.
“Stocks are still showing they are the best game in town as energy prices sink, dragging deflation expectations,” said Daniel Weston, chief investment officer at Aimed Capital GmbH in Munich. That could prompt “further ECB action to come to
support growth and an inflation target,” he wrote in an e-mail.
The Stoxx 600 has rallied 12 percent from an October low as ECB President Mario Draghi said the lender may broaden its asset-buying program to include government bonds, while central banks in Japan and China boosted stimulus measures. The ECB’s next policy meeting is on Dec. 4. More than half the economists in a Bloomberg survey expect the central bank to buy government bonds if it expands its stimulus program.
Germany’s DAX Index briefly rose to 10,038.21, above its highest close. The DAX climbed as much as 0.8 percent before declining 0.2 percent. Standard & Poor’s 500 Index futures advanced 0.2 percent and the MSCI Asia Pacific Index added 0.3 percent today.

Energy Stocks

A gauge of oil and gas shares rose 1.9 percent for the best performance among 19 industry groups in the Stoxx 600. Afren Plc and Genel Energy Plc surged more than 8 percent. Energy stocks tumbled 10 percent in the six days through yesterday as oil prices deepened a slump after the Organization of Petroleum Exporting Countries signaled it would take no action to ease a global glut.
Mining shares also gained. BHP Billiton Ltd., which gets more than half its revenue from iron ore and petroleum, climbed 2.4 percent. Anglo American Plc advanced 1.6 percent and Rio Tinto Group added 1.2 percent.
Among stocks moving on corporate news, Friends Life Group Ltd. rose 4.4 percent after Aviva Plc agreed to buy it for about 5.6 billion pounds ($8.8 billion) in stock. Aviva added 2.2 percent as Chief Financial Officer Tom Stoddard said the deal will reduce his firm’s cost of capital.
Neopost SA slumped 17 percent after saying organic revenue this year will be close to stagnant, compared with a previous target of 1 percent to 3 percent growth. The manufacturer of mailing and shipping equipment cited third-quarter results and difficult conditions in France.
Deutsche Lufthansa AG lost 1.5 percent after saying a pilot strike that began yesterday will affect all routes today until midnight. The airline aims to maintain at least 50 percent of scheduled traffic.