Most European stocks rose, with the benchmark gauge heading for a fourth weekly gain, as measures of manufacturing in China and the euro area increased and investors awaited progress in American budget talks. U.S. index futures climbed, while Asian shares were little changed.
Alcatel-Lucent (ALU) SA surged 9.7 percent after saying it reached a $2.1 billion financing deal with Goldman Sachs Group Inc. and Credit Suisse Group AG. Akzo Nobel NV (AKZA) jumped 5.2 percent after agreeing to sell its North American decorative- paints business to PPG Industries Inc.
The Stoxx Europe 600 Index (SXXP) advanced less than 0.1 percent to 279.75 at 9:37 a.m. in London, as two shares on the gauge rose for each that fell. The measure has rallied 20 percent since this year’s low on June 4 as the European Central Bank and the Federal Reserve expanded asset purchases. Futures on the Standard & Poor’s 500 Index expiring in March added 0.3 percent today, while the MSCI Asia Pacific Index was little changed.
“Investors are relieved and pleased that China seems to have turned a corner, with hopes that China will again provide a catalyst for equity markets as we go into the next year,” Lorne Baring, managing director at B Capital SA in Geneva, which oversees almost $500 million, said in a phone interview. “While we are seeing a certain amount of optimism, there is some suppression in stock markets as fiscal-cliff negotiations carry on being discussed blow by blow with the media.”
The Stoxx 600 yesterday fell for the first time this month as Fed Chairman Ben S. Bernanke said the central bank doesn’t have the tools to offset the impact of automatic tax increases and spending cuts, should U.S. lawmakers fail to prevent them.
China Manufacturing
In China, a report showed manufacturing may expand at a faster pace this month. The December preliminary reading was 50.9 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with the 50.8 median projection in a Bloomberg News survey.
The Shanghai Composite Index jumped the most since October 2009 also on speculation that state-backed institutions were buying shares.
In the euro area, a preliminary report showed that a measure of manufacturing climbed to 46.3 in December, up from 46.2 in the previous month. A composite index that also includes services jumped to 47.3 this month, the highest since March, from 46.5 in November. A reading below 50 means contraction.
U.S. Economy
A report at 9:15 a.m. New York time may show that industrial production in the world’s largest economy increased 0.3 percent in November, after a 0.4 percent drop the previous month, according to the median forecast of 81 economists surveyed by Bloomberg News.
President Barack Obama and House Speaker John Boehner met yesterday to discuss averting more than $600 billion of spending cuts and tax increases before a year-end deadline, with no public announcement of progress.
Obama and congressional Democrats have said they won’t discuss spending cuts unless Republicans agree to higher tax rates for top earners. Republicans are insisting on reductions to entitlement programs such as Medicare.
Alcatel-Lucent rallied 9.7 percent to 93.6 euro cents after saying it will get a $2.1 billion multiyear financing commitment from Goldman Sachs and Credit Suisse. The deal “provides stabilization and enhances Alcatel-Lucent’s liquidity profile,” the company said.
Akzo Nobel advanced 5.2 percent to 47.83 euros, the biggest jump since July, after PPG Industries agreed to buy its North American decorative-paints business for $1.05 billion.
Centamin Plc (CEY), which plunged 47 percent yesterday after a fuel dispute halted production at its gold mine in Egypt, surged 25 percent to 34.55 pence today. The company said Chevron, Centamin’s fuel supplier, had been notified by Egyptian General Petroleum Corp. that fuel supply may be resumed.
Fiat SpA (F), which owns 58.5 percent in Chrysler Group LLC, slumped 5.6 percent to 3.50 euros. Trading in the stock was briefly suspended after Il Messaggero reported that Chief Financial Officer Richard Palmer held meetings with banks on a possible capital increase to fund its acquisition of the remaining 41.5 percent of Chrysler.
Bloomberg
