European stocks gained as investors awaited policy decisions from the Bank and the Bank of England, and as companies from Metro AG to Lloyds Banking Group Plc reported earnings that beat forecasts. U.S. futures and Asian shares also rose.
Metro AG and Lloyds each advanced at least 6 percent. Sanofi fell 6.4 percent as France’s largest drugmaker cut its 2013 profit estimate. Royal Dutch Shell Plc declined 4.4 percent in London after quarterly earnings trailed projections. Finmeccanica SpA lost 1.3 percent after reporting a first-half net loss.
The Stoxx Europe 600 Index climbed 0.7 percent to 301.63 at 9:05 a.m. in London. The gauge rallied 5.1 percent in July, its biggest jump since October 2011, as the Federal Reserve said it remains flexible on the pace of asset purchases and as companies from UBS AG to Publicis Groupe SA reported increased profit. Standard & Poor’s 500 Index futures advanced 0.5 percent, while the MSCI Asia Pacific Index gained 1.2 percent.
“We can once again expect Mr. Draghi to be pressed on the obvious questions surrounding rate cuts as well as negative deposit rates,” Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in a note. “The most recent manufacturing data from Europe has raised expectations that the European economy is slowly lifting itself out of recession. If these numbers come in as expected then it is highly unlikely that we will see any policy changes today from the ECB.”
ECB, BOE
The European Central Bank will leave its benchmark interest rate at a record low of 0.5 percent today, according to economists in a Bloomberg survey. The central bank announces its decision at 1:45 p.m. in Frankfurt and President Mario Draghi holds a press conference 45 minutes later.
In the U.K., the Bank of England’s Monetary Policy Committee will maintain its asset-purchase target at 375 billion pounds ($571 billion) and its key rate at a record low of 0.5 percent, according to the median estimates in Bloomberg surveys of economists. The decision is due at noon in London. Governor Mark Carney will present the MPC’s review of steering policy expectations next week, after signaling in July that interest rates will remain low for an extended period.
The final reading of a euro-area manufacturing gauge, based on a survey of purchasing managers, increased to 50.3 in July from an initial reading of 50.1, confirming expansion for the first time in two years, according to a report released today.
In China, the official manufacturing index unexpectedly rose to 50.3, compared with economists’ estimates for a drop to 49.8. Another manufacturing gauge released by HSBC Holdings Plc and Markit Economics fell to 47.7, an 11-month low.
Metro Earnings
Metro climbed 6.6 percent to 27.64 euros after Germany’s biggest retailer posted second-quarter earnings before interest, taxes and some items of 276 million euros ($366.3 million). Analysts on average had estimated 269.2 million euros.
Lloyds Banking Group Plc advanced 6.1 percent to 72.67 pence after posting its first profitable six-month period in three years. Profit before exceptional items climbed to 2.9 billion pounds, higher than the 2.34 billion pounds estimated by analysts.
“As consequence of significant progress made in strengthening the balance sheet, we now expect to start talks with our regulators in the second half of this year on the timetable and conditions for dividend payments,” the bank said.
BIC, AstraZeneca
Societe BIC SA added 7 percent to 89.20 euros after posting first-half revenue that beat estimates and saying it will meet its annual targets. The stationery maker reported sales of 937.5 million euros, exceeding the 928.8 million euros projected by analysts.
“We are confident that we will achieve our full year 2013 objectives in an environment that remains volatile,” the company said in a statement.
Sanofi fell 6.4 percent to 75.05 euros after saying full-year earnings per share excluding some costs and currency fluctuations will fall by 7 percent to 10 percent from last year. It had previously forecast a drop of 5 percent at worst. The Paris-based company reported second-quarter profit that missed analysts’ estimates.
Shell lost 4.4 percent to 2,140 pence as Europe’s biggest oil company said second-quarter profit excluding one-time items and inventory changes fell to $4.6 billion from $5.7 billion a year earlier. That missed the $6 billion predicted by analysts.
Finmeccanica dropped 1.3 percent to 3.88 euros as Italy’s biggest aerospace company reported first-half net loss of 79 million euros, compared with a profit of 50 million euros a year earlier. It maintained its 2013 forecast for earnings before interest, taxes, amortization and one-time items of around 1.1 billion euros.
Bayerische Motoren Werke AG dropped 1.7 percent to 72.34 euros as Germany’s biggest automaker said second-quarter profit fell 8.8 percent to 2.07 billion euros. Analysts on average had forecast 2.08 billion euros.
Source: Bloomberg
