Stocks rise in European markets

European stocks rose for the first time in three days after earnings from Lafarge SA, Deutsche Boerse AG and British American Tobacco Plc beat analysts' estimates. US index futures and Asian shares retreated.

Lafarge rallied the most this year after the world's largest cement maker said profit rose, led by emerging markets. Deutsche Boerse climbed after Europe's biggest exchange posted a 58 percent increase in first-quarter profit, and British American Tobacco reached a two-week high. UBS AG fell, limiting gains, after the Swiss bank said it's being investigated in the United States.

Europe's Dow Jones Stoxx 600 Index advanced 0.8 percent to 329.36 at 1:31 pm in London, trimming this year's decline to 9.7 percent. Investors are becoming less concerned the collapse of the US subprime market will stifle economic growth after the world's biggest banks reported $319 billion in credit losses.

"The earnings results have been better on the whole than people had thought, apart from those areas that are really in the thick of problems," like financials, said Jane Coffey, head of equities at Royal London Asset Management, which manages $63 billion. "We are a reasonable way through the credit crisis."

Futures on the Standard & Poor's 500 Index fell 0.1 percent before a report on pending home sales, while the MSCI Asia Pacific Index decreased 0.5 percent.

Stocks rallied after a report showed US worker productivity in the first quarter unexpectedly accelerated.

Europe's Stoxx 600 has climbed 13 percent since reaching the lowest in more than two years on March 17 after companies from Ericsson AB to Royal Dutch Shell Plc reported earnings that beat analysts' estimates.

Forecasts raised

Analysts now predict profit will rise 0.2 percent this year for companies in the Stoxx 600, based on data compiled by Bloomberg as of May 2. That compares with a forecast of a 0.5 percent decline two weeks earlier.

Nokian Renkaat Oyj, the Nordic region's biggest tiremaker, jumped 14 percent, the most in the Stoxx 600, after sales in Russia fueled better-than-expected earnings. TomTom NV, a maker of navigation devices, led technology stocks higher on speculation it will receive European approval to buy mapmaker Tele Atlas NV.

National benchmark indexes rose in all 18 western European markets. France's CAC 40 gained 0.9 percent, while Germany's DAX rose 1 percent. The UK's FTSE 100 advanced 0.6 percent.

Deutsche Boerse gained 2.2 percent to 102.59 euros after first-quarter profit rose to 304.2 million euros, buoyed by derivatives trading. The exchange was expected to report net income of 254 million euros, according to the median estimate of five analysts surveyed by Bloomberg.

Profit included a one-time currency gain of about 25 million euros related to the financing of International Securities Exchange Holdings Inc.

BAT increased 1.8 percent to 1,973 pence after Europe's largest cigarette maker said first-quarter profit gained 21 percent to 599 million pounds on price increases and improved sales of the premium brands.

That beat the 559 million-pound median estimate of six analysts. Revenue gained 14 percent to 2.54 billion pounds.

Commerzbank AG added 1.8 percent to 23.71 euros. Germany's second-largest bank by assets said first-quarter profit declined 54 percent to 280 million euros as the collapse of the US subprime market led to writedowns and lower trading income.

The bank wrote down the value of investments including subprime-related securities by 244 million euros, bringing total losses from the credit crunch to 827 million euros.

Agencies

(China Daily 05/08/2008 page17)