Jooi Long Tan · @jooilong
10th Dec 2010 from Twitter for iPhone
European Stocks Fluctuate as TomTom, Heritage Oil Shares Climb
European stocks fluctuated, with the Stoxx Europe 600 Index heading for its second straight weekly rally, as investors speculated that company profits will overcome the sovereign-debt crisis. U.S.-index futures rose and Asian shares sank.
TomTom NV gained 4.3 percent as UBS AG recommended buying the shares of Europe’s biggest maker of portable navigation devices. Heritage Oil Plc advanced 2.6 percent after the Daily Mail reported that Malaysia’s Petroliam Nasional Bhd, also known as Petronas, may bid for the U.K.-based company. Standard Chartered Plc lost 2.7 percent after BofA Merrill Lynch Global Research cut its stance on the shares.
The Stoxx 600 added 0.1 percent to 276.15 as of 8:27 a.m. in London, even as the measure headed for its first back-to-back weekly gain since October. The gauge has surged 8.8 percent this year as corporate profits climbed, the Federal Reserve unveiled a $600 billion bond-purchase program to assist the U.S. economy’s recovery and the European Union bailed out Greece and Ireland.
“Europe’s debt woes are considered overdone,” Jonathan Sudaria , a trader at London Capital Group Holdings Plc, said. “Whilst concerns about nations on the periphery still exist, they have not been able to dent the trend of improving economic data from Europe’s larger nations, in particular Germany.”
Futures contracts on the Standard & Poor’s 500 Index expiring in March next year rose 0.1 percent. The MSCI Asia Pacific Index slid 0.1 percent.
Strategists’ Predictions
European equities will climb 12 percent through the end of 2011 as rising earnings and record-low interest rates help companies overcome the sovereign-debt crisis, a Bloomberg survey of 13 strategists shows. Goldman Sachs Group Inc., the most bullish forecaster, says the Stoxx 600 will rally 20 percent because profits may expand twice as fast as the 14 percent average rate in more than 26,000 analyst estimates compiled by Bloomberg.
Pacific Investment Management Co. raised its forecast for U.S. growth next year in response to the “massive amount” of stimulus that will boost the economy, according to its chief executive officer Mohamed El-Erian . The manager of the world’s biggest bond fund now sees the economy growing 3 percent to 3.5 percent in the fourth quarter of next year from the same period of this year. That compares with its previous estimate for 2 percent to 2.5 percent growth and the 2.2 percent gain forecast for this year by the International Monetary Fund.
TomTom, Heritage Oil
TomTom climbed 4.3 percent to 4.25 euros as UBS upgraded the shares to “buy” from “neutral.”
Heritage Oil advanced 2.6 percent to 438.2 pence after the Daily Mail reported that Petronas may make a 1.71 billion-pound ($2.7 billion) cash bid for the U.K.-based oil explorer. The newspaper didn’t say where it obtained the information.
Petronas may offer 600 pence a share, although any deal will need the approval of Heritage’s Chief Executive Officer Tony Buckingham , who owns 27.9 percent of the company. Heritage explores for oil in Malta and the Kurdish north of Iraq.
MorphoSys AG advanced 5.1 percent to 16.65 euros. The company increased its revenue guidance for 2010 to a range from 91 million euros ($120.6 million) to 94 million euros from a previous range of 89 million euros to 90 million euros, citing extra sales from its purchase of Sloning Biotechnology GmbH. MorphoSys has also signed a long-term alliance with Pfizer Inc. for the U.S. drugmaker to use its Sloning Technology Platform.
Standard Chartered fell 2.7 percent to 1,760.5 pence after the bank was cut to “neutral” from “buy” at BofA Merrill Lynch.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net