By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks pushed higher on Tuesday
after euro-zone data showed another round of weak inflation and
German jobless figures came in better than expected. Broker moves
triggered gains for stocks such as BASF SE and Delta Lloyd NV, as
well as losses for Swedish Match AB and Debenhams PLC.
Adding to earlier gains, the Stoxx Europe 600 index rose 0.4% to
328.37, led by banking and oil sectors, after seeing a drop of 0.2%
on Monday.
Vestas Wind Systems AS was among the biggest movers on the Stoxx
600, up more than 6%. The wind-turbine maker upgraded its free
cashflow expectations for 2013 to around 1 billion euros ($1.36
billion).
Broker moves triggered action for several companies. Shares of
BASF SE added nearly 3% after UBS lifted shares to buy from
neutral, saying the company should resume a re-rating trend
relative to other big-cap chemical household names. UBS also cut
Air Liquide SA to sell from neutral, triggering a drop of 1.3%,
saying shares in the industrial-gas producer should resume
underperformance versus BASF.
The German DAX 30 index was up 0.6% to 9,457.30 after data
showed seasonally adjusted jobless claims in the country falling
15,000 to 2.97 million in December, which was better than expected.
German retail sales data also came in better than expected, with a
November preliminary rise of 1.5%.
Europe stocks also rose after data showed euro-zone inflation
falling back in December, further below the European Central Bank's
target.
Tom Rogers, senior economic advisor to the EY Eurozone Forecast,
said the central bank will "need to remain alert to the risk of
deflation, and following Thursday's Governing Council meeting, be
prepared to respond to increased speculation over which policy
tools it might use to try and address falling prices."
Among other stocks, Delta Lloyd NV rose 3.5% after J.P. Morgan
Cazenove lifted shares to overweight from neutral, in a broad note
on European life insurers. The investment bank said it's positive
on the sector, as it sees increasing focus on balance-sheet
strengthening, cash flows and restructuring. It said shares of
Delta Lloyd, specifically, should continue to see a re-rating.
On the downside, shares of Swedish Match AB were a top decliner,
off 5.4% after Citi cut it to sell from neutral, saying competition
pressures in Sweden were likely to continue in 2014. It cited
specific worries about the cigar sector.
A number of tech companies were affected by a note from Barclays
analysts on the sector. They said they see a gradual improvement
for the European technology sector, but shares of Software AG fell
3.5% after a cut to equalweight from overweight, while ST
Microelectronics NV slid 2.4% after a cut to underweight from
equalweight.
Shares of Severn Trent PLC fell 2% after J.P. Morgan Cazenove
cut shares in the water company to underweight from neutral. It
cited concerns about rising regulatory risks, and a decreasing
likelihood of mergers and acquisitions activity.
Banks and oil stocks were among the biggest gainers for the
Stoxx 600, boosting several indexes. The French CAC 40 index gained
0.4% to 4,243.54, with banks such as Credit Agricole SA and BNP
Paribas SA up 4% and 2.3.%, respectively. Shares of Total SA (TOT)
rose 0.7%.
In Frankfurt, shares of Commerzbank AG jumped 3.5%, while in
London, HSBC Holdings PLC (HSBC) rose 1.5%. BP PLC (BP) gained 1%,
helping drive the FTSE 100 index up 0.4% to 6,754.82.
Also in London, retailer Debenhams PLC fell 1.1% after HSBC cut
it to neutral from overweight, citing a poor Christmas sales
season. However, it lifted fellow retailer Next PLC to overweight
from neutral, but those shares were flat.
The best performer for Tuesday so far was the Spanish IBEX 35
index , up 1.6% to 10,050.30, with Banco Santander SA (SAN) up 2.6%
and BBVA SA (BBVA) up 3.7%.
Data released Monday from Markit indicated strengthening in
Spain helped raise a gauge of the euro zone's services sector and
the broader private sector in December.
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