European stocks rose after earnings from Swiss Reinsurance Co., Swatch Group AG and Inditex SA rekindled optimism businesses and consumers will sustain spending even after concern about terrorism halted a yearlong rally. Deutsche Bank AG, the region's second-biggest bank by assets, increased after Chief Executive Officer Josef Ackermann said the year ``has started well.'' Yara International ASA, the world's largest maker of fertilizers, surged in Norway on its first day of trading. ``The earnings came at the right time,'' said Juergen Lukasser, who helps manage about $6.8 billion at Constantia Privatbank AG in Vienna and is buying shares of companies such as Vivendi Universal SA and Munich Re. ``Equities were oversold.''
The Dow Jones Stoxx 50 Index climbed 0.9 percent to 2633.88 at 10:27 a.m. in London. The Stoxx 600 added 0.8 percent, with 17 of the 18 industry groups higher. The Euro Stoxx 50, a measure for the 12 countries sharing the euro, advanced 1.7 percent. Swiss Re, the world's second-biggest reinsurer, said results will improve this year and Swatch forecast higher sales. The reports renewed speculation that profit growth will continue in the wake of heightened concern about terrorism. The Stoxx 50 and Euro Stoxx 50 erased their gains for the year following the terrorist bombings in Madrid on March 11.
Concern `Overdone'
``The concerns about spending can be overdone,'' said Stuart Fraser, who helps manage the equivalent of $26 billion, including retail stocks, at Brewin Dolphin Holdings Plc in London. ``Company results have been good.'' Benchmark indexes rose in all of the 16 Western European markets open today, except Norway. Greece is closed for a holiday. Germany's DAX Index added 1.8 percent, France's CAC 40 Index climbed 1.4 percent and the U.K.'s FTSE 100 Index advanced 0.8 percent. March futures on the Euro Stoxx 50 gained 0.9 percent to 2707. Swiss Re, the world's second-biggest reinsurer, jumped 4.4 percent to 87.35 Swiss francs, leading gains on the Stoxx 50. The company reported net income of 1.7 billion francs ($1.33 billion) as prices rose for coverage and a stock-market recovery boosted returns. The median estimate of analysts surveyed by Bloomberg predicted profit of 1.53 billion francs. Munich Re, the largest reinsurance company, added 2.6 percent to 89.20 euros. Scor SA, France's No. 1 reinsurer, rose 1.5 percent to 1.35 euros.
`Higher' Sales Forecast
Swatch, the world's No. 1 watchmaker, rose 2.9 percent to 32.25 Swiss francs. The company said 2004 will continue the trend of the second half of 2003, when net income increased 6.3 percent to 306 million francs. The company also said it expects ``higher sales'' this year. All of its brands, which include Longines and Tissot, gained ``substantial'' market share last year, it said. Inditex, the owner of the Zara clothing chain, surged 11 percent to 18.15 euros after reporting profit of 161.8 million euros ($196 million). That surpassed the 137 million euros expected in a median estimate from five analysts surveyed by Bloomberg News. Goldman, Sachs & Co. increased its recommendation on the stock to ``outperform'' from ``underperform.''
Deutsche Bank gained 1.5 percent to 66.35 euros. ``The present outlook for the global economy is better than it was a year ago,'' Ackermann said in a letter to shareholders. As long as there are ``no negative surprises'' in the markets, the bank is ``very optimistic'' about reaching its targets, he said. Yara surged 20 percent to 49.1 Norwegian kroner. Investors had bid for 20 times as many shares as were sold in the initial public offering by Norsk Hydro ASA.
Profit Beats Estimates
Next Plc, the U.K.'s third-biggest clothing retailer, added 1.5 percent to 1,381 pence. The company said fiscal full-year pretax profit rose 17 percent to 353 million pounds ($643 million). It had been expected to have pretax profit of 342 million pounds, according to the median of nine estimates gathered by Bloomberg News. Sales growth accelerated after the fiscal-year end, it said.
Bayer AG, Europe's third-largest chemicals maker, gained 2.1 percent to 19.94 euros. The stock was raised to ``equal-weight'' from ``underweight'' at Morgan Stanley. Sodexho Alliance SA, the world's second-biggest caterer, was also lifted to ``equal- weight'' from ``underweight'' by the brokerage. Its shares gained 4.7 percent to 24.82 euros. Repsol YPF SA, Spain's largest oil company, climbed 0.4 percent to 16.42 euros. Deutsche Bank increased its rating on the company to ``buy'' from ``hold,'' saying the shares are inexpensive compared with competitors. It also cited rising gas prices in Argentina as reason for the revision. ///www.bloomberg.com