MW: European shares on track for best quarter in years
Adidas, Puma shares move higher; Legal & General upgraded
LONDON (MarketWatch) -- European shares rose for the third straight session on Wednesday, with the Stoxx 600 index on track to record its best quarterly gain in years.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 244.60, +1.01, +0.42%) climbed 0.5% to 244.68 on Wednesday, helped by an advance for miners such as Xstrata (UK:XTA 942.00, +20.71, +2.25%) , up 2.2%.
Mineral extractors are leveraged to improving economic data, one of the factors behind the strong performance for shares in the third quarter.
The Stoxx 600 index closed up 0.2% on Tuesday, with that move bringing quarter-to-date gains to 18.4% -- the best quarterly performance for the index since the fourth quarter of 1999.
Martin Schneider, fund manager for European equities at DWS in Frankfurt, said that positive news is "certainly helping equity markets altogether to recover."
Economic data showing an improvement on Wednesday included Germany's unemployment rate, which edged lower in September. That move surprised the market which had been expecting an increase. See full story.
Additionally, U.K. consumer confidence data improved to negative 16 in September, up from negative 25 last month, according to the GfK NOP consumer confidence index which is carried out on behalf of the European Commission.
Further afield, a gauge of China's manufacturing activity released Wednesday indicated expansion for the sixth straight month in September. See full story.
On a regional level, the U.K. FTSE 100 index (UK:UKX 5,165, +5.69, +0.11%) rose 0.2% to 5,170.37, the German DAX index (DX:DAX 5,725, +11.18, +0.20%) climbed 0.2% to 5,723.32 and the French CAC-40 index (FR:PX1 3,831, +17.15, +0.45%) advanced 0.4% to 3,830.87.
Asia equity markets ended mixed while U.S. stock futures were pointing to mild gains on Wall Street on Wednesday. Dow Jones Industrial Average futures were up 38 points. See Indications.
Sneaker giant Nike Inc. (NKE 63.62, +3.53, +5.88%) saw its shares climb in after-hours U.S. trading on Tuesday after its fiscal-first-quarter profit topped analyst expectations. See full story.
Nike's European-headquartered rivals were higher on Wednesday, with Adidas (DE:ADS 36.50, +0.59, +1.64%) shares up 1.7% and Puma (DE:PUM 227.54, +7.07, +3.21%) shares up 2.9%.
Financial firms and insurance firms were also strong, with hedge fund manager Man Group (UK:EMG 326.30, +18.00, +5.84%) shares up 5.5%.
The firm said its assets under management have stabilized in the last few months, helped by a slowdown in withdrawals by major institutional investors. See full story.
In the insurance sector, Allianz (DE:ALV 86.58, +2.83, +3.38%) (AZ 12.18, -0.06, -0.49%) shares climbed 3.3% and Axa (FR:CS 18.47, +0.49, +2.70%) (AXA 26.16, -0.11, -0.42%) shares rose 2.6%.
Legal & General (UK:LGEN 86.80, +3.51, +4.24%) shares climbed 5.1% after it was upgraded to hold from sell at Deutsche Bank as part of a note on the sector. The broker said that it sees European solvency regulations as less of a threat amid narrowing credit spreads.
Swiss drug maker Novartis (CH:NOVN 52.15, +0.85, +1.66%) climbed 1.8% after it was upgraded to buy from hold at Citigroup, which cited such factors as an attractive respiratory portfolio and positive currency tailwinds.
However, German drug and chemical giant Bayer (DE:BAYN 47.78, -0.72, -1.49%) declined 2.3% after it was cut to neutral from buy at UBS, which said the valuation is no longer attractive.
The broker said that the stock has climbed 50% from March 18 and most catalysts for 2009 have come through.
Schneider at DWS noted that shares overall are still coming from "a pretty low" base.
And even with sharp gains for the third quarter, shares are still only back to where they traded a year ago and remain well off multi-year highs hit in mid-2007 before the financial-market crisis pushed economic growth off a cliff.
Data has been mixed of late and U.S. stocks ended with losses on Tuesday after an index of consumer confidence fell unexpectedly.
On Wednesday, the chairman of Marks & Spencer (UK:MKS 367.70, -6.80, -1.81%) , Stuart Rose, said that "whilst there is more visibility in the marketplace and consumers appear more confident, we continue to be cautious about the outlook. We expect 2010 to be a tough year and we will continue to run the business accordingly."
Shares of the U.K. department-store retailer fell 2.1% in London. The company said second-quarter U.K. comparable sales were down 0.5%. Total sales in the quarter ended Sep. 26 rose 2.7%, with total U.K. sales up 1.9%.
