By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Europe's benchmark stock index posted a
fourth straight day of gains on Tuesday, after German business
confidence jumped to a five-month high in August and U.K. data
showed demand for homes climbed to a four-year high.
The Stoxx Europe 600 index climbed 0.6% to 307.79, closing at
the highest level since late May.
"Data in the euro area and the U.K. have surprised to the upside
lately, bond markets are more calm and structural reforms in
Southern Europe have started to have effect," said Peter Garnry,
equity strategist at Saxo Bank in Copenhagen.
"The biggest surprise is that three months again no one would
have said we would see positive growth in the second quarter, but
now we have seen upward revisions to Germany's GDP forecasts and
the consensus for GDP growth in the euro zone is now 0.2% in the
second quarter," he added.
The first estimate of the currency bloc's economic-growth figure
for the second quarter is out on Wednesday. If the number comes in
positive territory it would technically mean an end to the region's
six-quarter recession. Goldman Sachs on Monday lifted its forecast
to 0.2% growth from a flat reading expected previously.
Among notable movers in the pan-European index on Tuesday,
shares of GAM Holding AG jumped 9.7% after the investment manager
reported a 58% rise in underlying net profit in the first half of
the year.
Shares of E.ON SE added 2.2% after the electric utility firm
reported a 6% rise in first-half net profit. Peer firm RWE AG added
4.5%.
Shares of K+S AG lost 1.5% after the potash maker posted
second-quarter revenue below market expectations.
German confidence at five-month high
More broadly, investors cheered data from Germany, where the ZEW
economic sentiment indicator -- a gauge of investor confidence --
jumped 5.7 points in August to stand at 42 points, the highest
level since March. Analysts expected a reading of 39.1, according
to FactSet.
The Mannheim-based Center for European Economic Research, or
ZEW, said the "first signs of an end to the recession in important
euro-zone countries may have contributed to the indicator's
rise."
"Furthermore, the economic optimism is supported by the robust
domestic demand in Germany," it said.
The DAX 30 index closed 0.7% higher at 8,415.76.
France's CAC 40 index climbed 0.5% to 4,092.50.
Economic data were also in the spotlight in the U.K. The Royal
Institute of Chartered Surveyors said its house prices balance rose
to +36 in July from +21 the previous month, and was the highest
since November 2006, when it reached +42. The reading marked the
fastest pace of price increases in more than six years with demand
for homes at a four-year peak.
The FTSE 100 index added 0.6% to 6,611.94.
Fresnillo PLC rose 5.6% in London after UBS initiated coverage
of the miner with a buy rating, saying it is "well positioned to
outperform in an uncertain price environment."
Shares of Resolution Ltd. gained 1.8% after the insurance firm
posted a 17% rise in operating earnings per share in the first
half.
Outside the main index in London, shares of Michael Page
International PLC dropped 4% after the recruitment firm reported a
10% drop in first-half earnings per share excluding exceptional
items.
Elsewhere, Adecco PLC lost 0.8% after Deutsche Bank cut the
employment agency to hold from buy.
Shares of Geberit AG slumped 7.3% after the bathroom-piping firm
said there had been a clear fall in the demand in many markets
since the fourth quarter of 2012 and an end to the trend is not in
sight.
Hennes & Mauritz AB (HNNMY) climbed 1.7% after Credit Suisse
lifted the fashion retailer to neutral from underperform.
In the U.S., stocks traded lower on Wall Street. Data showed
total retail sales rose 0.2% in July, falling short of the 0.3%
expected by economists surveyed by MarketWatch. Excluding the 1.0%
drop in motor vehicle sales, however, retail sales rose 0.5%, ahead
of expectations of 0.4%.
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