Unilever, Novartis rise after broker upgrades; Air France-KLM drops
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) — European stock markets edged higher Tuesday as investors shrugged off talk of a Chinese rate hike amid hopes that Ireland’s budget plan will scrape through a crucial parliamentary vote.
The Stoxx Europe 600 index (ST:STOXX600 274.23, +2.85, +1.05%) rose 0.3% to 272.17 in morning trading, with oil companies, retailers and construction stocks all contributing to the rise.
The modest gains came after a broadly stronger session for Asian markets, as a tentative U.S. deal to extend the Bush-era tax cuts helped offset worries over Chinese interest rates after a report that the country's central bank may hike rates this weekend.
Among Europe’s main indexes, the U.K. FTSE 100 (UK:UKX 5,819, +48.57, +0.84%) gained 0.2% to 5,779.64, the French CAC 40 (FR:PX1 3,811, +62.03, +1.65%) climbed 0.4% to 3,764.43 and the German DAX 30 index (DX:DAX 7,015, +60.15, +0.87%) rose 0.3% to 6,976.27.
Ireland’s ISEQ index was one of the strongest in the region. It rose 1.1% to 2,783.60 ahead of a crucial vote in parliament on the country’s budget. The vote is likely to be very close, but media reports in Ireland Tuesday suggested the plan will be approved.
Bank stocks were mostly lower ahead of the vote and after German Chancellor Angela Merkel on Monday dismissed calls to increase the size of the European Union’s bailout fund or create European sovereign bonds.
Shares in Societe Generale (FR:GLE 39.19, +0.58, +1.50%) dropped 1.2% in Paris and Deutsche Bank (DE:DBK 38.08, -0.07, -0.18%) (DB 50.73, -1.47, -2.82%) fell 1.5% in Frankfurt. Bank of Ireland (IE:BIR 0.38, +0.02, +4.95%) (IRE 2.16, +0.32, +17.38%) , however, rose 6% in Dublin.
Among other stocks in focus, BP PLC (UK:BP. 459.15, +9.15, +2.03%) (BP 42.81, +1.32, +3.18%) rose 1.3%, leading the oil sector higher, with Tullow Oil (UK:TLW 1,213, +16.00, +1.34%) up 0.8%.
Retailer Tesco PLC (UK:TSCO 428.25, +8.25, +1.96%) rose 1.2% after reporting an 8.2% rise in total sales in the fiscal third quarter, which analysts said was slightly better than markets had expected.
Consumer-goods giant Unilever (UK:ULVR 1,927, +74.00, +3.99%) (UL 29.43, +0.07, +0.24%) rose 2.6% in London after it was upgraded two notches to overweight from underweight at Morgan Stanley.
Swiss pharmaceutical group Novartis AG (NVS 54.50, -0.25, -0.46%) (CH:NOVN 54.25, +0.75, +1.40%) rose 1.3% after it was upgraded to outperform from neutral at Credit Suisse and Bayer AG (DE:BAYN 58.90, +1.35, +2.35%) gained 1.5% after also being upgraded to outperform by the broker.
In the airline sector, Air France-KLM (FR:AF 14.23, -0.07, -0.49%) reversed early gains to trade down 1.8% after it announced a 4.3% rise in November passenger traffic. The stock led the sector lower, with Iberia (ES:IBLA 3.25, +0.00, +0.06%) dropping 1.4% in Madrid.
Among smaller companies, U.K. house builder Bellway PLC (UK:BWY 607.50, +49.50, +8.87%) rose 2.8% after forecasting growth of up to 20% in pretax profit.
