Barclays and Posco push stocks higher
LONDON » European stocks climbed for a fourth day, paced by banking shares, as investors worldwide gained confidence that markets will weather the fallout from losses in the U.S. subprime mortgage market.
Barclays Plc rose the most in two weeks after the U.K. bank said losses from failed debt funds probably won't exceed 75 million pounds ($151 million). Svenska Handelsbanken AB surged to a three- month high after Norway's Storebrand ASA bought the company's insurance unit.
The Morgan Stanley Capital International World Index climbed 0.1 percent to 1,562.64. In Asia, steelmaker Posco advanced on speculation prices will increase and a Nikkei newspaper report that Japan's Nippon Steel Corp. may raise its dividend. Latin American stocks rose for a fourth day, led by materials companies, on speculation global growth will drive demand for the region's exports. The U.S. market is closed today for the Labor Day holiday.
"Corporate news is still very good," said Mike Lenhoff, who helps oversee about $36 billion as chief strategist at Brewin Dolphin Securities Ltd. in London. "Markets will settle and resume their upward trend."
U.S. stocks advanced Friday after President Bush promised to help people with delinquent mortgages to keep their homes. The yen fell today against the 16 most-active currencies on speculation the Bank of Japan will delay raising interest rates, prompting investors to buy higher-yielding currencies with Japanese money.
Europe's Dow Jones Stoxx 600 Index gained 0.3 percent to 376.99. National benchmarks advanced in 13 of the 18 western European markets. Germany's DAX Index added 0.1 percent, while France's CAC 40 lost 0.2 percent. The U.K.'s FTSE 100 increased 0.2 percent. In Asia, Japan's Nikkei 225 Stock Average slipped 0.3 percent to 16,524.93. In Latin America, Mexico's Bolsa gained 1.5 percent and Brazil's Bovespa 0.4 percent.
Barclays climbed 4 percent to 638 pence, the biggest advance since Aug. 17. The U.K. lender appealed to central banks to help restore confidence in money markets. It's the responsibility of central banks to improve the stability of the market for short-term loans, President Robert Diamond told the Sunday Telegraph. The comments were confirmed by spokesman Ian Bowen.
Svenska Handelsbanken rallied 7.8 percent to 206.50 kronor, the highest since June 5. Storebrand, Norway's largest publicly traded insurer, said it will buy the Swedish' bank's SPP life- insurance unit for 18 billion kronor ($2.6 billion). Storebrand shares dropped 7.8 percent to 82.70 kroner.
The Morgan Stanley Capital International index of Latin American shares rose 0.9 percent to 3,718.68, led by miner Cia. Vale do Rio Doce and cement maker Cemex SAB.
Cemex, North America's biggest cement maker, rose 1.7 percent to 36.19 pesos. Vale, the world's biggest iron ore producer, rose 1.5 percent, to 41.20 reais. Chinese iron ore demand will push prices at least 9.5 percent higher next year, B. Ramesh Kumar, chief executive of NMDC Ltd., India's biggest producer of the ore, said yesterday in Hyderabad.
Shares of Posco added 3.1 percent to 592,000 won. Hyundai Steel Co., South Korea's second-largest steel mill, jumped 4.1 percent to 78,100 won.