MONDAY, 01 NOVEMBER 2010

 

EUROPEAN stocks climbed, rebounding from the biggest sell-off in five weeks, as companies from Eni SpA to Dassault Systemes SA posted results that topped analysts’ estimates. Asian shares and U.S. index futures also rose.

Eni, Europe’s fourth-largest oil company, climbed 2.9 per cent in Milan. Dassault Systemes surged 7.3 per cent as the software maker also raised its profit outlook. France Telecom SA gained 3.7 per cent after saying earnings increased more than analysts predicted.

The Stoxx Europe 600 Index climbed 0.9 per cent to 267.25 at 1:44 p.m. in London, paring yesterday’s 0.8 per cent slump. The measure has gained 2.9 per cent so far this month as companies from Nokia Oyj to Danone posted results that exceeded forecasts and investors speculated the Federal Reserve will unveil another round of bond purchases at its November meeting next week as it seeks to shore up the economy.

“The market likes the fact that some bellwether companies have reported results that are in line or better, so that is a positive,” said Ioan Smith, a director at Knight Capital Europe in London. “I am generally cautious though. There are a lot of potential road blocks still out there, starting with the Fed meeting which will be key.”

The Fed has asked bond dealers and investors for projections of central bank asset purchases over the next six months, along with the likely effect on yields, as it seeks to gauge the possible impact of new efforts to spur growth.

The New York Fed survey, obtained by Bloomberg News, asks about expectations for the initial size of any new program of debt purchases and the time over which it would be completed. It also asks firms how often they anticipate the Fed will re- evaluate the programme, and to estimate its ultimate size.

Standard & Poor’s 500 Index futures gained 0.6 per cent yesterday as companies including Dow Chemical Co. and Colgate- Palmolive Co. report results. U.S. stocks yesterday pared more than half of their losses in late afternoon trade, paced by a surge in Broadcom Corp. after the company posted better-than- estimated quarterly revenue. Benchmark indexes still closed lower after commodity-related-shares retreated.

The MSCI Asia Pacific Index rose 0.6 per cent after Australia & New Zealand Banking Group Limited reported profit that beat estimates and Canon Inc. raised its earnings forecast.

Stocks extended gains after U.S. data showed an unexpected drop in U.S. unemployment benefits last week to the lowest level in three months. A separate report showed European confidence in the economic outlook improved more than forecast in October, led by a jump in sentiment among manufacturers.

Of the 127 companies in the Stoxx 600 to have announced results since October 7, 72 per cent have beaten analyst estimates for per-share income, according to data compiled by Bloomberg. In the U.S., 83 per cent of S&P 500 companies have topped predictions in the period.

Eni rallied 2.9 per cent to 16.17 euros after reporting a 48 per cent jump in adjusted net income to 1.70 billion euros ($2.4 billion) as crude prices climbed. That surpassed the 1.34 billion-euro average estimate in a Bloomberg survey of analysts. Dassault jumped 7.3 per cent to 55.69 euros after reporting a 44 per cent rise in third-quarter net income to 55.4 million euros as the company won new customers for its design software. The company raised its full-year revenue guidance.

France Telecom rallied 3.7 per cent to 17.30 euros after the company posted a 1.9 per cent rise in earnings before interest, taxes, depreciation and amortization for the third quarter to 4.26 billion euros, driven by its expansion into Africa and the Middle East. Analysts had predicted Ebitda of 4.14 billion euros, according to the average of nine estimates compiled by Bloomberg. Revenue climbed four per cent.

Telenet Group Holding NV jumped 4.6 per cent to 27.84 euros. The cable operator said it will generate more than 225 million euros of cash not required for reinvestment this year, up from a previous prediction of more than 200 million euros.

 

Source: Guardian