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European stocks higher on German survey data

European stocks higher on German survey data

By SARAH TURNER
LONDON (AP) _ European shares ended higher for a second straight session on Tuesday, helped by a survey pointing to unexpected resilience in the German economy and by Standard & Poor's reaffirming the credit ratings of two key U.S. bond insurers.
The pan-European Dow Jones Stoxx 600 index rose 1.4 percent to 330.00, led by banks and insurers after Standard & Poor's took positive rating actions on bond insurers MBIA Inc. and Ambac Financial on Monday, reassuring investors worried about further write-downs in the sector.
"The market has become vulnerable to good news. Monolines looked like they were going to get downgraded but their status was confirmed," said Robert Quinn, European equity strategist at Standard & Poor's Equity Research.
Against this background, shares of French insurer AXA advanced 3.7 percent, while Deutsche Bank shares moved up 2.9 percent.
Another help to the financial sector came from Standard Chartered, as shares rose 7.9 percent after the Asia-focused lender posted a 27 percent increase in 2007 pretax profit to US$4 billion.
Of national indexes, Britain's FTSE 100 index closed up 1.5 percent to 6,087.40, and the French CAC-40 index advanced 1.1 percent to 4,973.07.
The German DAX 30 index rose 1.5 percent to 6,985.97, garnering support from a closely watched gauge of German business sentiment which posted an unexpected rise in February.
"The result should remove some doubts about the resilience of the economy to the financial market turmoil," noted Kenneth Broux, economist at Lloyds TSB Corporate Markets.
And Elin Ottosson, strategist at Cazenove, said in a recent note: "Supported by falling unemployment and increased wage growth, Germany seems to be best placed within the euro zone to tackle slower growth following an uplift in domestic demand."
Solid gains from Siemens also propped up the German share index. Shares rose 2.5 percent after the conglomerate announced plans to cut as many as 6,800 jobs at its enterprise communications division.
U.S. shares turned higher, with IBM helping lift the market by raising its guidance and disclosing plans to buy back US$15 billion (euro10.12 billion) in stock.
The European earnings season continued on Tuesday and shares in Spanish infrastructure firm Grupo Ferrovial rose 8.3 percent. The Spanish builder that also owns British airport operator BAA on Tuesday posted a 49 percent drop in annual profit as higher refinancing costs, slower building growth, and lower exceptional gains dented the bottom line. Still, revenue rose 18.4 percent to euro14.63 billion (US$21.7 billion), helped by the first full year of consolidating revenue from BAA.
Shares in German sneaker maker Puma climbed 6.1 percent as the firm posted a 2 percent rise in 2007 net profit to euro269 million (US$400.2 million) following a good performance in Asia.
Meanwhile, shares in airline Deutsche Lufthansa rose 5.9 percent after the German airline said its annual profit more than doubled and it unexpectedly hiked its dividend by 55 cents.
Other airlines on the rise included Air France-KLM, up 2.2 percent, and British Airways, up 2.1 percent.
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Sarah Turner is a correspondent for Dow Jones Newswires.


Updated : 2020-12-03 01:11 GMT+08:00