European Stocks Climb to 4 1/2-Year High Before Summit

By Tom Stoukas

European stocks advanced to a 4 1/2-year high before the region’s policy makers began a two-day summit in Brussels. U.S. index futures rose while Asian shares were little changed.

Assicurazioni Generali SpA rallied the most in seven months after Italy’s biggest insurer reported increased operating profit. HeidelbergCement AG soared to the highest since 2008 as debt declined more than estimated. Deutsche Lufthansa AG climbed 3.1 percent as Europe’s second-largest airline agreed to buy aircraft from Airbus SAS. The Stoxx Europe 600 Index (SXXP) gained 0.5 percent to 296.97 at 10:27 a.m. in London, the highest level since June 2008. The benchmark measure has risen 6.1 percent this year as data on U.S. payrolls and Chinese exports bolstered confidence in the global economic recovery and central banks around the world continued stimulus measures.

“Markets are grinding higher, pushed by better-than- expected U.S. data resisting fiscal headwinds,” said Witold Bahrke, who helps oversee $55 billion as senior strategist at PFA Pension A/S in Copenhagen. “On the other hand, anxiety is growing steadily, primarily regarding euro-zone developments. Nobody is expecting anything concrete from the summit, but there is the potential for surprises, for example on Cyprus.”

Standard & Poor’s 500 Index futures expiring in June advanced 0.2 percent today, while the MSCI Asia Pacific Index (MXAP) fell less than 0.1 percent.

European Summit

European leaders start a two-day summit today, with euro- area finance ministers meeting separately tomorrow to discuss a bailout for Cyprus. Policy makers may loosen austerity measures as the recession and mounting unemployment in southern Europe overtake the debt crisis as the region’s biggest headache.

A Labor Department report at 8:30 a.m. in Washington may show U.S. initial jobless claims increased to 350,000 in the week ended March 9, from 340,000 the previous period, according to the median forecast of economists in a Bloomberg survey.

The number of shares changing hands in Stoxx 600 companies was 12 percent less than the 30-day average today, according to data compiled by Bloomberg.

Generali (G) rose 6.8 percent to 13.02 euros, the biggest gain since Aug. 3. The insurer said fourth-quarter operating profit climbed 12 percent from a year earlier to 928 million euros ($1.2 billion), boosted by the non-life insurance business.

HeidelbergCement increased 3.2 percent to 56.35 euros, the highest price since November 2008. The German cement maker said debt declined more than expected last year as improved earnings covered dividends and repayments. Borrowings fell 700 million euros to 7 billion euros, while analysts had predicted 7.4 billion euros.

Lufthansa Fleet

Lufthansa rose 3.1 percent to 15.97 euros. The company agreed to renew its short-haul fleet with 100 mostly fuel- efficient aircraft from Airbus, as the airline seeks to cut kerosene costs that constitute its single biggest expense.

European Aeronautic, Defence & Space Co. (EAD), the parent of Airbus, advanced 0.5 percent to 42 euros.

U.K. retailers rallied. Home Retail Group Plc (HOME) climbed 11 percent to 147.6 pence, a 20-month high, after sales beat expectations at Homebase home-improvement stores and the Argos catalog chain in the last two months of the fiscal year.

Wm Morrison Supermarkets Plc, the U.K.’s fourth-biggest food retailer, rose 1 percent to 274.4 pence and Ocado Group Plc, the nation’s largest Internet-only grocer, surged 21 percent to 166.1 pence. The companies are in talks that may lead to a licensing agreement to use Ocado’s intellectual property and knowledge to help Morrison develop an online business.

Booker Gains

Booker Group Plc, Britain’s biggest food wholesaler, surged 6.8 percent to 123.9 pence, the highest price in seven years, after the U.K. Competition Commission provisionally approved its acquisition of Makro Holding Ltd.

Aggreko Plc (AGK) added 6.2 percent to 1,953 pence as the world’s largest provider of mobile power supplies won a contract in Mozambique and Namibia worth more than $200 million.

K+S AG gained 3.8 percent to 37.44 euros after Europe’s largest potash maker predicted earnings and sales will rise this year.

OC Oerlikon Corp. (OERL) fell 3.6 percent to 12.20 Swiss francs. The world’s largest maker of textile machinery will appoint a new chief executive officer to replace Michael Buscher, who led the company through a reorganization since joining in 2010.

Chief Financial Officer Juerg Fedier will act as interim CEO, the Pfaeffikon, Switzerland-based company said, without giving any reason for the switch.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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