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European stocks rose to a five-year high as HSBC Holdings Plc reported increased profit and investors awaited this week’s interest-rate decision from the European Central Bank.
The Stoxx Europe 600 Index gained 0.3 percent to 322.49 at 4:37 p.m. in London, the highest since May 2008. The benchmark measure climbed 0.4 percent last week, extending this year’s rally to 15 percent, as companies from BP Plc to Alcatel-Lucent SA posted results that exceeded analysts’ estimates and cooling inflation fueled speculation the ECB will ease monetary policy.
National benchmark indexes rose in 14 of the 18 western European markets this week.
FTSE 100 6,763.62 +28.88 +0.43% CAC 40 4,288.59 +15.40 +0.36% DAX 9,037.23 +29.40 +0.33%
Bank of America Corp., UBS (UBSN) and Royal Bank of Scotland Group Plc forecast the ECB will cut rates at the meeting on Thursday, according to survey of economists, with the rest predicting no change. The ECB last lowered its benchmark rate in May to a record 0.5 percent.
“Although the ECB meeting is still a few days away and expectations are for no change on current policy, traders are eagerly anticipating some form of dovish hint that looser conditions are on the way,” Jonathan Sudaria, a trader at Capital Spreads in London, wrote in e-mailed comments.
HSBC rose 3 percent to 707.7 pence. Third-quarter pretax profit advanced to $4.53 billion from $3.48 billion as costs as a proportion of revenue, excluding gains and losses in the value of the bank’s own debt, fell to 61 percent from 64 percent.
PostNL climbed 8.2 percent to 4.18 euros in Amsterdam, the highest price since March 2012. The company said it has cut costs and boosted its forecast for full-year underlying cash operating profit to 130 million euros ($175 million) to 160 million euros, compared with previous guidance of 50 million euros to 90 million euros.
K+S AG soared 8.7 percent to 20.88 euros, the largest gain since April 2009. Commerzbank AG upgraded Europe’s biggest producer of potash to hold from reduce and HSBC raised the shares to neutral from underweight. The stock has still plunged 40 percent this year.
Fuchs Petrolub SE increased 5.5 percent to 62.65 euros, the biggest rally in eight months, as the German maker of lubricants said earnings before interest and taxes gained 5.8 percent to 83.4 million euros in the third quarter.
Ryanair tumbled 12 percent to 5.34 euros, the biggest drop since July 2008. Europe’s largest discount airline said net income for the year ended March 31 will be in the range of 500 million euros to 520 million euros. The Dublin-based carrier had previously predicted profit of as little as 570 million euros and had cautioned that it may fall short of that number. Earnings last year were 569 million euros.