Thursday, December 20, 2007

European Stocks Rise; Johnson Matthey, Daimler, Cap Gemini Gain

By Andreas Hippin

Dec. 20 (Bloomberg) -- European stocks gained for the first time in four days, as investors speculated that concern world economies will stagnate was exaggerated. U.S. index futures rose.

``Fears of a global slowdown and more credit-market turmoil were going over the top,'' said Herbert Perus, who helps oversee the equivalent of $57 billion as head of global equities at Raiffeisen Capital Management in Vienna. ``Companies sensitive to economic growth were sold without looking at their value.''

Johnson Matthey Plc, the maker of a third of all autocatalysts, led the Dow Jones Europe Stoxx Chemicals Index higher on takeover speculation. Daimler AG advanced after heavy- truck sales in the region rebounded last month. Cap Gemini SA, Europe's biggest computer-services company, rose after earnings at U.S. rival Accenture Ltd. beat analysts' estimates.

The Stoxx 600 Index added 0.4 percent to 360.15 at 12:06 p.m. in London. The measure has lost 1.4 percent this year and is down 10 percent from a 6 1/2-year high reached Jun. 1 on concern losses tied to U.S. subprime mortgages will slow economic growth and hurt corporate earnings.

Futures on the Standard & Poor's 500 Index expiring in March climbed 0.2 percent to 1,467.80. European government bonds declined, snapping three days of gains. The cost of borrowing in euros fell for a third day as central banks keep injecting cash into global money markets to ease a year-end lending squeeze.

The U.K. economy expanded 3.3 percent in the third quarter, the Office for National Statistics said in London today. That was faster than economists estimated. German consumer confidence unexpectedly recovered from the lowest in almost two years as shoppers grew more willing to spend over the holiday season.

National Benchmarks

National benchmarks gained in 14 of the 18 western European markets. France's CAC 40 climbed 0.6 percent, as did the FTSE 100. Germany's DAX added 0.4 percent. The Stoxx 50 rose 0.5 percent, as did the Euro Stoxx 50, a measure for the euro region.

Johnson Matthey soared as much as 19 percent to 2,067 pence. The stock last traded up 8 percent at 1,882 pence, the steepest gain in the Stoxx 600.

``Shares in Johnson Matthey have spiked this morning on market speculation of an impending bid from Dow Chemical'' Co. said Lee Humphreys, a sales trader at Instinet.

Ian Godwin, director of corporate communications at Johnson Matthey, declined to comment on market speculation. Sue Breach, a spokeswoman for Dow in London, declined to comment.

Umicore SA, one of the world's three biggest makers of automotive catalysts, jumped 7 percent to 161.8 euros.

Daimler, Continental

Daimler, the world's largest truckmaker, advanced 0.8 percent to 64.63 euros. European heavy-truck sales surged 16 percent last month as demand recovered from a slump following the introduction of stricter emission standards a year ago.

Registrations of trucks heavier than 16 tons rose to 28,204 vehicles in November from 24,237 a year earlier, the Brussels- based European Automobile Manufacturers Association said.

Continental AG rallied 2.8 percent to 86.54 euros. The region's second-biggest tiremaker plans to sell a large part of Siemens AG's VDO auto-parts division only two weeks after it acquired the unit, Sueddeutsche Zeitung reported, without saying where it obtained the information.

Cap Gemini gained 2.5 percent to 40.18 euros. Accenture posted fiscal first-quarter profit that topped analysts' estimates after the close of U.S. exchanges yesterday.

`Strong Spending'

``Accenture beat consensus expectations, indicated continued strong spending in software and IT services and gave strong guidance for 2008,'' said Jesper Kruger, who helps manage about $64 billion at ATP in Copenhagen.

ArcelorMittal, the largest steelmaker, climbed 2 percent to 49.79 euros. Chief Executive Officer Lakshmi Mittal told Frankfurter Allgemeine Zeitung that problems in financial markets won't hurt worldwide demand.

Accor SA added 1.2 percent to 53.45 euros. Europe's biggest lodging company agreed to sell 57 hotels in France and Switzerland for 518 million euros ($744 million) to focus on running properties rather than owning them.

Debenhams Plc, Britain's second-largest department-store company, rose 2.2 percent to 82.25 pence. The Times said Micky Jagtiani, chairman and chief executive officer of Dubai retailer Landmark Group, may consider a joint bid for the company. An out-of-hours call to Landmark's Dubai office was not answered.

Total SA and OMV AG led oil companies higher. Crude climbed for a second day after a government report showed U.S. inventories declined more than expected last week.

Total, the region's largest refiner, added 1.6 percent to 55.41 euros. OMV, the biggest oil company in central Europe, gained 3 percent to 53.46 euros.

Tullow Oil Plc, the U.K. explorer that's seeking to boost reserves with discoveries in Africa, slid 3.7 percent to 626 pence after results from a well in Uganda indicated fewer reserves than expected.

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