European Stocks Advance as Real Estate, Mining Companies Rally

May 18, 2011, 12:39 PM EDT By Sarah Jones

May 18 (Bloomberg) -- European stocks climbed, snapping the longest losing streak in two months, as Land Securities Group Plc led gains in property companies and basic-resource producers rallied with commodities.

Land Securities surged the most in almost two years after the U.K.’s largest real-estate investment trust reported earnings that topped estimates. Antofagasta Plc climbed as copper jumped the most in two months in London. Ageas led declining shares as benchmark gauges in the euro region’s peripheral countries fell.

The Stoxx Europe 600 Index rose 0.3 percent to 278.17 at the 4:30 p.m. close in London. The measure, which fell for the previous four days, is still down 4.5 percent from this year’s high on Feb. 17 as a selloff in commodities and concern the debt crisis will derail the economic recovery overshadowed company profits and government stimulus measures.

“Equities will continue to grind higher, but there will be pockets of volatility with geopolitical news flow,” said Kevin Lilley, a London-based fund manager who helps oversee about $2 billion at Royal London Asset Management. “Companies have got strong balance sheets and policy stimulus will only get removed when it’s clear that there is sufficient growth.”

National benchmark indexes gained in 12 of the 18 western European markets today. The U.K.’s FTSE 100 rallied 1.1 percent and Germany’s DAX advanced 0.7 percent. Portugal’s PSI-20 fell 0.4 percent and Greece’s ASE dropped 1.4 percent as Alpha Bank SA slid 3.6 percent to 3.52 euros.

Greek Debt

European Central Bank officials today ruled out a Greek debt restructuring, clashing with political leaders over a solution to the sovereign financial crisis. Ministers earlier in the week floated the idea of extending Greece’s debt-repayment schedule as it struggles to meet the terms of its 110 billion- euro ($156 billion) bailout.

Bank of England policy makers voted 6-3 to keep interest rates on hold this month as the majority warned that tightening policy now could damp consumer spending and harm the recovery. The U.S. Federal Reserve was due to release minutes from last month’s policy meeting after the close of European trading.

Fed Bank of St. Louis President James Bullard said in a Bloomberg Television interview that the central bank is in a “fairly good position” to pause in its stimulus and that “it is reasonable” to expect policy tightening by the end of 2011.

Land Securities Soars

Land Securities surged 6.4 percent to 795.5 pence, its biggest gain since August 2009, after reporting a 14 percent increase in annual net income to 1.24 billion pounds ($2 billion) as the value of its properties increased. That beat analysts’ projected profit of about 979 million pounds, according to a Bloomberg survey.

British Land Co., the U.K.’s second-biggest REIT, advanced 4.6 percent to 604.5 pence and Hammerson Plc, the third-largest, rallied 3.2 percent to 479.2 pence. A gauge of real-estate companies in the Stoxx 600 had the biggest gain in two months.

Antofagasta, the copper producer controlled by Chile’s Luksic family, rose 2.9 percent to 1,208 pence as base metals advanced on the London Metal Exchange. Copper had the biggest increase since March 17.

Kazakhmys, Kazakhstan’s biggest copper company, gained 3.2 percent to 1,256 pence and Vedanta Resources Plc increased 1.8 percent to 2,135 pence.

Eurasian Natural Resources Corp. rallied 4.3 percent to 841 pence after Citigroup Inc. upgraded the producer of metals in Kazakhstan to “buy” from “hold.”

Yara, SGL

Yara International ASA rose 2 percent to 305.4 kroner after the price of corn rose for a fifth day in Chicago, the longest winning streak since December. The world’s biggest publicly traded nitrogen-fertilizer maker also announced new season nitrate prices in Europe.

SGL Carbon SE jumped 6 percent to 35.77 euros after the company’s biggest shareholder, Susanne Klatten, increased her voting rights in the world’s biggest maker of carbon and graphite products to 26.98 percent last week. The German billionaire is the owner of investment company Skion GmBH.

Ageas dropped 3.6 percent to 1.95 euros after the majority owner of Belgium’s biggest life insurer said rising bond yields depleted the value of the cushion available to absorb losses in its insurance business. The market value of government and corporate bonds held by Ageas subsidiaries fell about 1.2 billion euros in the quarter, reducing shareholders’ equity by 0.7 percent.

Storebrand ASA, Norway’s largest publicly traded insurer, lost 2.8 percent to 49.42 kroner.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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