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Spain bailout hopes keep Europe stock rally alive
2012年10月18日 / 下午4点55分 / 5 年前

Spain bailout hopes keep Europe stock rally alive

* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 up 0.2 pct

* FTSEurofirst just shy of 14-month high hit in Sept

* Euro STOXX 50 enjoying best week so far in 2012

* Stocks attractive vs fixed income -Swiss Life Private Bank

* Nokia’s better-than-feared results spark short-covering

By Blaise Robinson

PARIS, Oct 18 (Reuters) - European stocks rose on Thursday in a late-session rally, climbing for a fourth day as investors bet Spain will soon request a bailout and that tensions surrounding the euro zone crisis will continue to abate.

Gains were limited, however, by a string of disappointing corporate results from bellwethers such as Nestle.

Shares in the food major dropped 1.7 percent after the firm said sales growth slowed more than expected in the first nine months of the year.

The FTSEurofirst 300 index of top European shares closed 0.2 percent higher at 1,120.56 points, just shy of a 14-month high of 1,122.76 hit in mid-September.

The Euro STOXX 50 index added 0.2 percent to 2,574.19 points, increasing the week’s gains to 4.3 percent, on track to post its best weekly performance since early December.

The euro zone blue chip index has gained 20 percent since late July, propelled by hopes that the European Central Bank’s new bond-buying programme will help resolve the region’s three-year-old debt crisis.

“There’s a feeling that what we’re seeing is the start of a solution for the euro zone,” said Xavier Lespinas, head of equities at Swiss Life Private Bank.

Spain is seen requesting a bailout in the next few weeks, which would trigger the ECB bond buying programme, easing pressure on the country’s borrowing costs and limiting risks of contagion to other euro zone countries.

“With a solution for Spain taking shape and with expected measures to support Chinese growth, stocks could gain another 10 percent before the end of the year,” Lespinas said.

“The returns you get in money markets and fixed income are so low that equities look quite attractive in comparison. The size of the investments in money markets and fixed income is so big that even a small rotation into equities would be a strong support for stocks.”

The average dividend yield on the Euro STOXX 50 is 3.7 percent, well above Germany’s current 10-year bond yield of around 1.6 percent.

Around Europe, UK’s FTSE 100 index added 0.1 percent on Thursday, Germany’s DAX index rose 0.6 percent, and France’s CAC 40 gained 0.2 percent.

So far this year, the FTSE 100 is up 6.2 percent, the DAX is up 26 percent and the CAC 40 is up 12 percent.

“Despite all the risks, it’s clearly a buyer’s market. Investors are looking for returns, and they are not getting anything in money markets, so we’re seeing a move towards riskier assets such as high-yield debt and equities,” said Philippe De Vandière, analyst at Altedia Investment Consulting in Paris.

“People are buying the trend right now, but the problem is that we’re running out of positive catalysts and the macro backdrop remains gloomy in Europe.”

Swiss watch maker Richemont dropped 3.5 percent after Swiss export data showed watch sales fell for the first time in 2-1/2 years, hit by slowing demand in China.

Sentiment surrounding luxury goods makers has recently turned sour after warnings over slowing sales from Burberry and Louis Vuitton owner LVMH..

Nokia closed a roller-coaster session up 1 percent. Shares in the mobile phone and telecom gear maker jumped as much as 10 percent around midday after the company’s better-than-feared quarterly results sent short sellers scrambling to cover their negative bets on the stock.

Nokia is among the most shorted stocks in Europe, with 17.5 percent of its shares out on loan, according to securities lending data from Markit, compared with an average of 2.4 percent for Euro STOXX 50 stocks.

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