11 Aug 2009
Aug. 11 (Bloomberg) -- European stocks rose as Resolution Ltd. agreed to buy Friends Provident Group Plc and a report showed the U.K. housing market improved in July, fuelling speculation the recession is ending. Asian shares climbed.Friends Provident gained 1.6 percent after the 177-year-old U.K. life insurer agreed to a takeover offer from Clive Cowdery's Resolution. Aioi Insurance Co. advanced 4.2 percent in Tokyo after reporting higher earnings. International Power Plc, the biggest U.K.-based electricity producer, advanced 5.6 percent after saying first-half net income surged 50-fold.
Europe's Dow Jones Stoxx 600 Index added 0.3 percent to 230.17 at 9:07 a.m. in London as two stocks climbed for each one that fell. The gauge has soared 456percent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The measure is valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
"The recovery will go on in equity markets," Christoph Riniker, an equity strategist at Bank Julius Baer in Zurich told Bloomberg Television. "We expect the trough in the economic cycle in the second and third quarters. Going forward the upcoming figures for GDP data should show us better results again."
The U.K. housing market improved in July as the biggest proportion of real-estate agents and surveyors in two years saw increases in home values, the Royal Institution of Chartered Surveyors said today.
European GDP
Second-quarter gross domestic product in the 16-member euro region shrank 0.5 percent from the first quarter, when it declined 2.5 percent, according to the median forecast of 15 economists polled by Bloomberg News. The European Union's statistics office is scheduled to release data on Aug. 13.
Standard & Poor's 500 Index futures expiring in September added 0.1 percent. Federal Reserve chairman Ben S. Bernanke and his four Federal Open Market Committee colleagues, gathering today and tomorrow in Washington, may acknowledge an improvement in the economic outlook while maintaining a pledge to buy as much as $1.75 trillion of bonds, economists said.
The MSCI Asia Pacific Index added 0.6 percent. Aioi advanced 4.2 percent to 477 yen. The casualty insurer said first-quarter net income climbed to 10.6 billion yen ($108.6 million) from 2.43 billion yen a year earlier.
‘Very Cheap'
Friends Provident climbed 1.6 percent to 76.2 pence after the insurer agreed to a 1.86 billion-pound ($3.06 billion) takeover offer.
"M&A is heading back," said Herbert Perus, Vienna-based head of global equities at Raiffeisen Capital Management. "Equities are very cheap at the moment and there is a lot of liquidity out there," he told Bloomberg Television.
International Power advanced 5.6 percent to 262.2 pence after saying first-half net income rose 50-fold, boosted by sales in Asia and Australia.
Adecco SA, the world's largest supplier of temporary workers, fell 2.2 percent to 51.7 Swiss francs after reporting a net loss of 147 million euros ($208 million) for the second quarter. Analysts surveyed by Bloomberg had predicted net income of 32.8 million euros.
Danske Bank A/S slid 3.2 percent to 114.50 kroner as Denmark's largest lender said it expects impairment charges to remain high this year after a surge in loan losses at home and in Ireland resulted in an unexpected second-quarter loss.
Per-share earnings at companies in the Stoxx 600 that reported results since July 8 have slumped 36 percent, while more than half have topped analysts' projections, according to data compiled by Bloomberg.
