Optimism over economy boosts European stocks

LONDON REPORT: Eurostoxx 50:2,979.06 (+8.50) Frankfurt DAX:7,064.36 (+1.94) Paris CAC:4,033.21 (+15.76)

EUROPEAN STOCKS rose yesterday, as optimism that economic reports later this week will show faster growth in the US economy offset declines in carmakers.

National benchmark indexes rose in 14 of the 18 western European markets.

President Barack Obama said today’s State of the Union address will focus on cutting the deficit, reducing unemployment and ensuring the US can compete with emerging economies.

The Federal Reserve will leave its benchmark rate unchanged at zero to 0.25 per cent at its January 25th-26th meeting, according to all the economists surveyed by Bloomberg.

The Fed this week plans to review its economic forecasts as confidence about the recovery increases, the New York Times reported, citing people familiar with the central bank’s deliberations.

President Anibal Cavaco Silva of Portugal, a former premier and economist, won an election yesterday for a second term as the country struggles to avoid following Greece and Ireland in requesting a bailout.

Northern Foods surged 17 per cent to 74p, its biggest increase in two months.

Greencore may still not be able to compete with Ranjit Boparan’s Boparan Holdings cash offer, the Sunday Telegraph said.

CRH advanced 2.7 per cent to €15.61 as UBS AG upgraded the the world’s second-largest maker and distributor of building materials to “buy” from “neutral”.

ITV climbed 2.5 per cent to 77.1p after Credit Suisse upgraded the shares of the UK’s biggest commercial broadcaster.

International Consolidated Airlines, formed from the merger of British Airways and Iberia Lineas Aereas de Espana SA, rose 0.9 per cent to 285p, valuing the company at £5.3 billion after a stock-market debut in London that concluded a 2½-year consolidation process.

Philips sank 5.5 per cent to €23.23, its largest decline in 21 months, after the company reported fourth-quarter profit of €463 million ($632.2 million), missing the €513 million average estimate of analysts surveyed by Bloomberg.

Porsche preferred shares dropped 3 per cent to €65.80. – (Bloomberg)