Nov. 22 -- Stocks in Europe and Latin America gained, led by drugmakers and utilities, whose profits are immune to an economic slowdown. U.S. markets were closed because of the Thanksgiving holiday.
GlaxoSmithKline Plc, Europe's largest drug company, Novartis AG of Switzerland and Brazil's Eletropaulo Metropolitana SA advanced. Air France-KLM Group rallied the most in more than four years after reporting earnings that beat analysts' estimates.
The MSCI World Index added 0.3 percent to 1,547.74 as of 3:28 p.m. in London, as a gauge of drug stocks advanced the most since August. The MSCI Asia Pacific Index fell to a two-month low, while Japan's Nikkei 225 Stock Average advanced.
``We prefer defensive stocks like health-care because these companies are able to maintain a high level of growth,'' said Jerome Schupp, who runs the Oyster Europe Value fund for Banque Syz & Co. in Geneva, which manages the equivalent of about $28 billion. He owns shares of Swiss drugmakers Novartis and Roche Holding AG and German utility E.ON AG.
European two-year note yields were near the most since 2004 against their U.S. equivalents as traders bet the Federal Reserve will cut interest rates while the European Central Bank stays on hold. The dollar set an all-time low against the euro for a third day.
Europe's Dow Jones Stoxx 600 Index rose 0.8 percent to 351.79. The U.K.'s FTSE 100 increased 0.6 percent, and Germany's DAX added 0.5 percent. France's CAC 40 climbed 0.7 percent.
Futures on the Standard & Poor's 500 Index added 0.6 percent to 1,426.4. Canada's S&P/TSX Composite Index increased 0.1 percent, while Brazil's Bovespa index rose 0.3 percent.
Glaxo, Novartis
GlaxoSmithKline, Europe's biggest drugmaker, jumped 6.5 percent to 1,235 pence. Novartis, the largest Swiss drug company, surged 5.9 percent to 61.5 francs.
Citigroup Inc. strategists including Darren Brooks boosted their recommendation on European health-care shares to ``neutral'' from ``underweight'' in a note dated yesterday. The Dow Jones Europe Stoxx Health Care Index has lost 11 percent this year, more than the broader gauge's 3.8 percent drop.
``There is a reasonable probability of a break in the sector's persistent underperformance,'' the strategists wrote in the note. ``A lot of the bad news is priced in.''
Bayer AG rose 3.9 percent to 57.41 euros after Merrill Lynch & Co. rated Germany's biggest drugmaker ``buy'' in new coverage, citing prospects for earnings growth in a report dated Nov. 21.
Chugai Pharmaceutical Co. advanced 5.2 percent to 1,819 yen, the most in a month, after the Tokyo-based company sought U.S. approval to sell Actemra as a rheumatoid arthritis treatment. Chugai is a unit of Roche Holding AG. Roche shares rallied 4.8 percent to 211.4 francs in Zurich.
Eletropaulo, E.ON
Eletropaulo, Brazil's largest electricity distributor, climbed 4.9 percent to 135.48 reais. E.ON, Germany's biggest utility, gained 1.1 percent to 139.24 euros.
British Energy Group Plc, the U.K.'s biggest power generator, surged 5.7 percent to 484.75 pence. Goldman, Sachs & Co. raised its price estimate on the stock 4.4 percent to 716 pence.
Analysts expect that earnings for European health-care companies will rise 9.5 percent this year, and profit for utilities to increase 12 percent, according to data compiled by Bloomberg for Stoxx 600 companies. That compares with 9.1 percent overall growth for members of the broader index.
``We see a flight to safety,'' said Helge Rechberger, head of equity market research at Raiffeisen Zentralbank in Vienna. Investors are buying ``utilities, health-care and phone companies.''
Air France, National Australia
Air France climbed 11 percent to 24.48 euros, the steepest advance since May 2003. Fiscal second-quarter profit doubled as it increased prices and sold more tickets for travel to Asia and North America. Net income for the three months ended Sept. 30 increased to 736 million euros ($1.09 billion) from 374 million euros a year earlier. Analysts surveyed by Bloomberg had estimated profit of 644 million euros. Revenue rose 5.8 percent to 6.49 billion euros.
British Airways Plc, Europe's third-biggest carrier, gained 5.7 percent to 484.75 pence. Deutsche Lufthansa AG, the region's second-largest airline, added 3.6 percent to 17.78 euros.
The MSCI Asia Pacific Index lost 0.6 percent to 153.81, its lowest close since Sept. 18. The Nikkei 225 gained 0.3 percent.
National Australia Bank Ltd., the nation's largest, slid 2 percent to A$40.48. The bank is underwriter for about half of the A$6.1 billion ($5.3 billion) of short-term debt Rams Home Loans Group has not yet been able to refinance, and said yesterday it may have to put the debt on its own balance sheet.
China Merchants, Morrison
China Merchants Bank Co., the country's largest dual- currency credit-card issuer, declined 3.7 percent to 37.30 yuan. Shanghai Pudong Development Bank Co., the Chinese partner of Citigroup Inc., dropped 4.9 percent to 46.92 yuan.
William Morrison Supermarkets Plc led U.K. retailers higher after reporting sales growth accelerated in the third quarter, beating analysts' estimates. Shares of the smallest of Britain's four main grocery chains gained 7.8 percent to 292 pence.
Sales rose 3.7 percent excluding gasoline at stores open at least a year in the 14 weeks to Nov. 4, growing faster than the 3 percent gain in the quarter's first seven weeks. That also beat the median estimate of 3.2 percent from five analysts surveyed by Bloomberg.
Tesco Plc, the U.K.'s largest retailer, increased 1.3 percent to 469 pence. J Sainsbury Plc, the U.K.'s third-largest supermarket chain, increased 1.1 percent to 412 pence.
Natixis rallied a record 17 percent to 13.22 euros. CIFG Guaranty, a bond insurer owned by Natixis, will receive $1.5 billion in fresh capital to protect its triple-A credit rating and be taken over by the French bank's controlling shareholders.
Lafarge, Burren Energy
Lafarge SA, the world's biggest cement maker, added 2.3 percent to 104.61 euros after Morgan Stanley upgraded the stock to ``overweight'' from ``equal-weight.''
Burren Energy Plc climbed 4.3 percent to 1,062 pence. Lakshmi Mittal, chief executive officer of ArcelorMittal, may acquire assets of Burren Energy, the Economic Times said, citing bankers it didn't identify.
Mittal's presence in Turkmenistan and Africa is an added reason for his interest in London-based Burren Energy, which produces crude oil in Turkmenistan and the Republic of Congo, the newspaper said. An unidentified Mittal spokesman declined to comment, the newspaper reported.
No comments:
Post a Comment