By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved cautiously
higher on Monday, taking a cue from a strong U.S. close last week
and encouraging comments from the German Bundesbank.
The Stoxx Europe 600 index added 0.2% to 287.68, climbing back
after a soft decline on Friday.
"People are more optimistic this year which is justified after
the bearish sentiment last year, but the macro challenges haven't
diminished at all," said James Ashley, senior European economist at
RBC Capital Markets.
"Some of the tail risks have been removed, but we still have to
address fiscal consolidation and a banking union, so there's still
a lot of hard work to be done," he added.
Shares of Novozymes AS rallied 6.6%, after the Danish biotech
firm reported a 38% rise in fourth-quarter net income to 1.56
Danish kroner ($0.28) a share from 1.13 kroner in the year-ago
period. For the 2013 outlook, the company said it expected to be
able to retain the current level of profitability.
The company further said that as of April 1, Peder Holk Nielsen
would take over as president and chief executive.
Shares of Admiral Group PLC jumped 5.2%, after Goldman Sachs
lifted the firm to buy from neutral and added the car insurer to
its conviction-buy list.
On a more downbeat note, shares of Compagnie Financiere
Richemont SA sank 5.1%, after the high-end watchmaker issued a
cautious outlook and posted lower-than-expected sales for the
fiscal third quarter.
The broader European stock markets mirrored gains on Wall Street
on Friday, when House Majority Leader Eric Cantor said that the
House of Representatives will vote to authorize a three-month
increase in the debt ceiling to give Congress time to pass a
budget.
U.S. markets were Monday closed for Martin Luther King Day.
Most Asian markets ended lower, led by Japan, as a two-day
meeting at the Bank of Japan got under way.
Back in Europe, remarks by the German Bundesbank helped markets
stay in positive territory. The bank said in its monthly review
that the prospects for the German economy has improved, as
companies' expectations have brightened. The report came just a
month after the central bank slashed its forecast for German growth
in 2013 to 0.4% from an earlier 1.6% estimate and warned that the
economy could sink into recession in the winter months.
Also on the European agenda, euro-zone finance ministers
prepared to meet for the first time in 2013, with investors
speculating that they could name a new chairman as soon as
Monday.
Among notable movers, shares of Unilever PLC gained 0.5% in
London, as Investec Securities raised the foods producer to buy
from hold ahead of fourth-quarter earnings later in the week.
On a more downbeat note in London, shares of Pearson PLC slumped
2.6%, after the publishing firm cut its earnings forecasts for
2012.
The FTSE 100 index rose 0.3% to 6,175.08, with GlaxoSmithKline
PLC (GSK) up 1.6%.
In France, shares of Carrefour SA rose 2.4% to 20.70 euros,
after Credit Suisse raised the target price on the supermarket
retailer to EUR25 from EUR20.
Shares of LVMH Moët Hennessy Louis Vuitton dropped 1.3%,
tracking luxury-goods peer Richemont lower.
The CAC 40 index picked up 0.4% to 3,756.95.
Outside the main index in France, shares of Air France-KLM
gained 4.3% to EUR8.44, after Citigroup doubled the price target on
the airline to EUR9.
Germany's DAX 30 index traded 0.5% higher at 7,741.93, with BASF
SE shares up 0.7%. The chemicals firm said it is preparing a
squeeze-out of the remaining shareholders of Norway's Pronova
Biopharma ASA.
Outside the major indexes, shares of PostNL NV jumped 5.6%,
after Nomura lifted the stock to neutral from reduce.
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