Banks lead Europe stocks higher on rival’s report
By Daniel at 21 July, 2008, 12:43 pm
Banks lead Europe stocks higher on rival’s report
By Steve Goldstein, MarketWatch
Last Update: 7/21/2008 12:02:00 PM
LONDON (MarketWatch) — Europe stocks advanced on Monday, led by banks after
another profit beat in the U.S. helped sentiment in the hard-hit sector.
Reversing early losses, the pan-European Dow Jones Stoxx 600 index (ST:SXXP) rose
0.6% to 282.36, led by banks after Bank of America (BAC) topped earnings
estimates.
European banks including UBS (UBS) also rose, with the Swiss bank rising 2.2%.
The Royal Bank of Scotland (UK:RBS) added 2.7% and Societe Generale (FR:013080)
gained 2.6%.
HSBC Holdings (UK:HSBA)(HBC) added 2.6% as the Daily Telegraph reported that
Stephen Green, its chairman, has met with officials from a Chinese sovereign
wealth fund several times and discussed the Chinese group buying a stake in the
banking giant.
By region, the U.K. FTSE 100 (UK:UKX) rose 0.5% to 5,404.30, the German DAX 30
(DX:1876534) added 0.7% to 6,424.84, and the French CAC 40 (FR:1804546) rose 0.6%
to 4,327.14.
Strategists at Morgan Stanley went overweight on European stocks for the first
time in three months, reducing their cash weighting by 3% and increased their
equity weighting by 3%.
“We view this is a first step ahead of a bear-market rally on the back of
oversold conditions, attractive valuations, and falling inflation later this
year, but we keep some powder dry in case markets fall again in the short term,”
they said.
Of stocks in the spotlight, Roche Holdings (RHHBY) shares slipped 4.8% after the
company said it would offer $89 a share, or $43.7 billion, to buy the rest of
Genentech (DNA) that it doesn’t already own.
Roche brought forward its earnings report as well, reporting a 2% first-half
profit decline on lower demand for Tamiflu. See Roche story.
Click for Detail
Investors appeared to switch into Roche’s local rival Novartis (NVS), which rose
1.5%.
Shares of Britain’s top mortgage lender, HBOS (UK:HBOS), dropped 6.2% to 265
pence as the bank said that shareholders representing 8.3% of its capital took up
its offer to buy shares at 275 pence each. See HBOS story.
Click for Detail
Hikma Pharmaceuticals (UK:HIK) dropped 16% as the group warned of deteriorating
conditions in its U.S. generics unit, which it now expects to be unprofitable.
Inmarsat (UK:ISAT) shares lost 9% as Harbinger Capital Partners ended talks about
buying the satellite-network operator. See Inmarsat story.
Click for Detail
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