European Stocks Complete Longest Rally Since October; LSE Jumps

Carmakers led a fourth day of gains in European stocks, while London Stock Exchange Group Plc jumped amid a bidding war.

The Stoxx Europe 600 Index added 1.4 percent at the close of trading, as all 19 industry groups rose. Since slumping to a 2013 low on Feb. 11, it has rebounded 12 percent amid rallies in banks and oil.

Concern over global-growth prospects, the efficacy of central-bank stimulus, a deepening oil rout and bad loans at banks weighed on investor sentiment earlier this year, dragging the Stoxx 600 into a bear market. That’s also made its companies cheaper. While the recent rebound has pushed up Stoxx 600 valuations to 14.7 times estimated earnings from last month’s low of 13.2, that’s still well below the 16.7 multiple at its peak in April.

Investors are also waiting for direction on monetary policies later this month, with the European Central Bank’s decision due next week and the Federal Reserve meeting on March 16. A report today showed euro-area manufacturing expanded more than forecast in February, while the unemployment rate fell further.

Among other shares active on corporate news, Swiss Life Holding AG rose 5.3 percent after its proposed dividend beat estimates. Rotork Plc jumped 12 percent after accelerating its cost savings program.

Source: Bloomberg

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Chinese Stocks Complete Biggest Weekly Advance in Two Months

China’s stocks capped their steepest weekly gain in two months after the government signaled increased support for the economy through higher spending and new measures to boost bank lending.

The Shanghai Composite Index slipped 0.1 percent to 2,860.02 at the close, paring this week’s advance to 3.5 percent. Financial shares declined. The People’s Bank of China will raise the amount of money some banks have as reserves after new loans jumped to a record in January, people familiar with the matter. Technology companies led gains this week. Hong Kong’s Hang Seng China Enterprises Index fell 0.6 percent at 3:12 p.m., trimming the five-day rally to 8.1 percent.

Policy makers have accelerated measures to bolster the economy after data this week showed a decline in exports and a pickup in inflation. In moves that could support lending after a record surge in new yuan loans last month, the PBOC loosened restrictions on what banks could pay on deposits and charge for loans, while the nation’s cabinet has discussed lowering the minimum ratio of provisions that banks must set aside for bad loans. Even with this week’s advance, the Shanghai gauge is the world’s worst performer this year after Greek and Italian equities, plunging 19 percent.

Source: Bloomberg

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