Tags: Europe | stocks | Novartis | UBS

European Stocks Advance to Three-Week High as Novartis, UBS Gain

Tuesday, 28 October 2014 01:16 PM

European stocks rose to a three-week high as Novartis AG and UBS AG rallied after posting financial updates and as U.S. consumer confidence surged to a seven-year high.

The benchmark Stoxx Europe 600 Index gained 1 percent to 328.45 at 4:30 p.m. in London as 18 of its 19 industry groups rose. The gauge briefly pared its advance after an earlier report showed U.S. durable-goods orders unexpectedly fell. Novartis added 1.8 percent after reporting third-quarter profit that beat estimates and UBS climbed 5.8 percent as it set aside funds for litigation.

“European markets are higher, driven by a number of positive corporate updates,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “The majority of companies have beaten expectations in the third- quarter earnings season to date and, if maintained, this could plot the course of markets for the remainder of the year.”

Federal Reserve officials are holding a two-day policy meeting and are expected to announce tomorrow an end to bond purchases that swelled the central bank’s balance sheet to a record. Minutes from the last meeting, when the Fed pledged to keep interest rates low for a considerable time, revealed officials’ concern that U.S. growth may be at risk from a global slowdown.

New York-based Conference Board said its gauge of U.S. consumer confidence rose to 94.5 in October, the highest reading since the same month in 2007. A separate report showed durable- goods orders in the world’s largest economy fell 1.3 percent in September, missing analysts’ median forecast for a 0.5 percent gain.

Fed Exit

“The macro numbers are becoming more and more important to evaluate when the Fed will exit its policy of cheap money,” Soeren Steinert, who helps manage $24 billion as associate director for equities trading at Quoniam Asset Management GmbH in Frankfurt, wrote in an e-mail. “The market is following every word and therefore, the Fed meeting is an important event this week.”

National benchmark indexes rose in 15 of the 17 markets that were open in western Europe. France’s CAC 40 climbed 0.5 percent, Germany’s DAX jumped 1.9 percent and the U.K.’s FTSE 100 added 0.7 percent. Greece was closed for National Holiday.

Novartis, UBS

Novartis gained 1.8 percent to 87.25 Swiss francs. Third- quarter core earnings of $1.37 a share beat estimates by five cents as sales of new medicines offset competition for the hypertension pill Diovan.

UBS rose 5.8 percent to 16.32 francs. The biggest Swiss bank set aside $1.94 billion for legal costs as it prepares to settle probes into alleged currency rigging.

Royal KPN NV advanced 5.1 percent to 2.52 euros. Savings through job cuts helped the Dutch phone company report a slowing decline in quarterly earnings. Sales beat projections.

UPM-Kymmene Oyj jumped 13 percent to 12.21 euros. Europe’s second-biggest paper maker posted better-than-estimated earnings and said it will announce a profit-improvement target in weeks.

A gauge of health-care stocks posted the only decline among the 19 industry groups in the Stoxx 600.

Sanofi fell 10 percent to 74.69 euros, the biggest slump since January 1999. The Paris-based drugmaker said sales of its diabetes products may not grow next year. Chief Executive Officer Chris Viehbacher said competition forced Sanofi to cut U.S. prices for its Lantus insulin last quarter.

Novo Nordisk A/S, the world’s biggest insulin maker, fell 5 percent to 254 kroner.

Standard Chartered Plc tumbled 9 percent to 997 pence, the lowest price since April 2009. Higher impaired loans and costs pushed the bank to post a 16 percent drop in third-quarter pretax profit.

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European stocks rose to a three-week high as Novartis AG and UBS AG rallied after posting financial updates and as U.S. consumer confidence surged to a seven-year high.
Europe, stocks, Novartis, UBS
Tuesday, 28 October 2014 01:16 PM
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