European stocks bounce back

European stocks climbed for the first time in six days, led by banks, phone companies and automakers, on speculation they have fallen too much compared with earnings.

Allianz SE, the region's biggest insurer, UBS AG, the largest bank, and phone maker Nokia Oyj rallied after valuations for the Dow Jones Stoxx 600 Index fell to near the cheapest levels since at least 2002.

US stocks recovered most of their losses on Tuesday after CNBC reported that a deal to bail out US bond insurer Ambac Financial Group Inc is progressing.

US index futures advanced yesterday, while Asian stocks retreated for a fifth day.

Europe's Stoxx 600 added 1.4 percent to 314.44 as of 11:43 am in London, as all 18 industry groups advanced, and futures on the Standard & Poor's 500 Index increased 0.5 percent. The MSCI Asia Pacific Index fell 0.7 percent.

"Black clouds over the market are dominating headlines but there are still sectors out there that look particularly cheap," said Henk Potts, who helps oversee $45 billion at Barclays Stockbrokers in London.

National stock indexes climbed in all of the 17 western European markets that were open.

France's CAC added 1.3 percent, while the United Kingdom's FTSE 100 increased 0.9 percent. Germany's DAX gained 1.6 percent.

The Stoxx 50 rose 1.2 percent, and the Euro Stoxx 50, a measure for countries sharing the euro, rallied 1.6 percent.

Allianz added 2.2 percent to 115.56 euros. Axa SA, Europe's second-largest insurer, added 1.3 percent to 21.56 euros. UBS, the region's biggest bank by assets, increased 2.9 percent to 33 Swiss francs.

A bailout of Ambac is progressing though not yet completed, CNBC reported on Tuesday, citing people in the New York State Insurance Department.

Nokia, the world's largest maker of mobile phones, rose 3.1 percent to 22.80, snapping a four-day decline that sent the shares to the lowest since Jan 23.

Siemens AG, Europe's biggest engineering company, gained 1.8 percent to 84.28 euros, rebounding from a six-week low. Carmaker Daimler AG rose 2 percent to 55 euros.

Agencies

(China Daily 03/06/2008 page16)