Most European Stocks Rise After Six-Day Slump as Carmakers Rally

By Jonathan Morgan

European stocks rose, buoyed by a jump in automakers, after their biggest six-day slump in three years. Germany’s DAX Index climbed as a gauge of investor expectations increased more than forecast.
The Stoxx Europe 600 Index added 0.2 percent to 324.03 at 10:32 a.m. in London, after losing as much as 1.2 percent earlier amid disappointing factory data from China and France. Daimler AG and Fiat Chrysler Automobiles NV gained as European car sales increased in November.
“Now we’ve seen growth in sales, this is very positive,” Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark, said by phone. “When you factor in the declining energy prices, this will be a leading sign that you will see further gains for carmakers. Put simply, consumption will be boosted by these permanently lower oil prices.”
European stocks erased their 2014 increase yesterday, with the Stoxx 600 closing at its lowest level since Oct. 20. After rallying 13 percent from this year’s low to
an almost seven-year high on Dec. 5, the index tumbled 7.9 percent in the past six days, dragged down by energy shares.
The DAX climbed 0.6 percent today, rebounding from its biggest two-day drop since 2011. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 34.9 in December, beating economists’ projections in a Bloomberg survey.

Car Sales

Automakers rallied 1.6 percent, with Daimler and Fiat advancing more than 2 percent. European registrations gained 1.2 percent to 989,457 vehicles last month from 977,607 a year earlier, the European Automobile Manufacturers’ Association said. Eleven-month sales rose 5.5 percent to 12 million cars.
Afren Plc and Saipem SpA climbed at least 4 percent as a gauge of oil-and-gas producers rebounded from a five-year low.
Among stocks moving on corporate news, Orange SA rose 2.7 percent and Deutsche Telekom AG climbed 1.5 percent. BT Group Plc started exclusive talks to buy their British wireless venture for 12.5 billion pounds ($19.6 billion).
Repsol SA (REP) dropped 1.4 percent after saying it will buy Talisman Energy Inc. for $8 per common share in a cash deal. Metro AG slid 3.1 percent after Germany’s biggest retailer said profit fell in the quarter ended September.