Optimism over economy boosts European indices

Eurostoxx 50:2,936.44 (+25.51) Frankfurt DAX:7,057.15 (+122.71) Paris CAC:4,024.40 (+3.664)

EUROPEAN STOCKS advanced for a sixth day yesterday, amid speculation the economy is strong enough to overcome Japan’s nuclear crisis.

The Stoxx 600 rose 0.7 per cent to 278.55 at the close in London, recouping the losses that followed Japan’s March 11th earthquake and tsunami.

“The situations in Japan and the Middle East aren’t going to derail the global recovery or markets,” Larry Kantor, head of research at Barclays Capital, said on Bloomberg Television’s On the Move with Francine Lacqua.

“Valuations are attractive and growth, at least in the northern countries, is solid. There’s still some upside,” he said.

Car shares climbed 1.7 per cent for the biggest gain among all industry groups.

Volkswagen, Europe’s largest car-maker, rose 2.8 per cent to €115.30, while Daimler, the world’s biggest truck-maker, gained 3.1 per cent to €49.84.

BHP Billiton, the world’s largest mining company, was up 1.4 per cent to 2,449p. Vedanta Resources, the largest copper producer in India, rose 3.4 per cent to 2,314p as Morgan Stanley said the shares had the potential to gain as much as 64 per cent.

Bellway climbed 4.4 per cent to 712p, the first advance in four days. The second-worst performing UK home builder in the past 12 months said first-half profit rose to £18.5 million ($29 million) after the company sold more homes at higher prices.

Tate and Lyle, the maker of the low-calorie sweetener Splenda, advanced 1.9 per cent to 559.5p.

Meda AB rose 3.2 per cent to 61.40 kroner as the drugmaker said Trobalt received European approval for epilepsy treatment.

Thomas Cook, Europe’s second-biggest tour operator, surged 5.9 per cent to 174.8p.

Sonova plunged 12 per cent 82.4 Swiss francs.

William Demant Holding, the world’s second-largest maker of hearing aids, surged 8.6 per cent to 462.4 kroner in Copenhagen trading, the biggest gain in the Stoxx 600. Dixons retreated 18 per cent to 13.69p, the biggest drop since 2008.

Marks and Spencer, the UK’s largest clothing retailer, slumped 3 per cent to 340.7p as the stock was initiated with a “sell” recommendation at MF Global. – (Bloomberg)