Commodity shares led gains, with BHP Billiton Ltd. (BHP) and Rio Tinto Group adding at least 3 percent. Nokia (NOK1V) Oyj, the world’s biggest maker of mobile phones, rallied after smartphone shipments beat estimates in the fourth quarter. Petropavlovsk Plc (POG) jumped 11 percent after reporting a 24 percent increase in 2011 gold production.
The Stoxx Europe 600 Index added 1.1 percent to 257.86 at the close in London as Fed Chairman Ben S. Bernanke made the case for a third round of asset purchases. The benchmark gauge has rallied 20 percent from its low on Sept. 22 amid signs that the U.S. economy is recovering and speculation that the euro area will contain its debt crisis. Analysts describe a bull market as a gain of 20 percent from the most-recent low.
“Bernanke is saying he’s ‘all in’ as long as the recovery isn’t any stronger,” said Henrik Drusebjerg, a Copenhagen-based strategist at Nordea Bank AB, who helps oversee $230 billion.
National benchmark indexes advanced in all 18 western European markets today. The U.K.’s FTSE 100 Index rose 1.3 percent, France’s CAC 40 Index added 1.5 percent and Germany’s DAX Index gained 1.8 percent.
Monetary Accommodation
U.S. policy makers are “prepared to provide further monetary accommodation if employment is not making sufficient progress towards our assessment of its maximum level, or if inflation shows signs of moving further below its mandate- consistent rate,” Bernanke said yesterday after European markets closed. Bond buying is “an option that’s certainly on the table,” he added.
The Fed also extended its pledge to keep interest rates low through at least late 2014.
Orders for U.S durable goods rose 3 percent in December, exceeding the 2 percent growth estimate in a Bloomberg News survey of economists. Orders advanced for a third month boosted by demand for aircraft, autos and business equipment.
Initial jobless claims for unemployment insurance payments climbed by 21,000 to 377,000 in the week ended Jan. 21, up from an almost four-year low in the prior period, Labor Department figures showed in Washington. The median forecast of 47 economists in a Bloomberg News survey projected 370,000.
Credit Default Swaps
The cost of insuring against default on European corporate debt fell to the lowest in five months. The Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated companies dropped 29 basis points to 607, the lowest since Aug. 17, according to JPMorgan Chase & Co. prices at noon in London.
In Greece, private creditors will submit a new offer with an average interest rate of 3.75 percent on bonds issued as part of a debt restructure, Kathimerini reported, without saying where it got the information.
Institute of International Finance Managing Director Charles Dallara will make the proposal when talks with Greek officials resume in Athens today, the newspaper said.
Italian bonds advanced as the nation sold its maximum target at an auction of zero-coupon and inflation-linked debt.
Shares of mining companies rallied the most of any industry group in the Stoxx Europe 600 as copper climbed to the highest level since September.
Mining Companies, Steelmakers
BHP Billiton, the world’s largest mining company, advanced 3.3 percent to 2,199.5 pence. Rio Tinto Group, the third biggest, rose 4.9 percent to 3,893 pence. Anglo American Plc (AAL), the third-largest copper producer, climbed 3.1 percent to 2,737 pence after saying iron-ore output increased 5 percent in the fourth quarter, while copper volumes jumped 10 percent.
European steelmakers rallied. ThyssenKrupp AG gained 4.5 percent to 22.14 euros. ArcelorMittal added 3.8 percent to 16.72 euros. Salzgitter AG advanced 6.8 percent to 48.67 euros.
Nokia climbed 2.7 percent to 4.17 euros after selling more smartphones last quarter than projected. Nokia sold 19.6 million smartphones that can handle tasks such as video calls and showing movies, the Espoo, Finland-based company said today. Analysts had predicted sales of 18.5 million smartphones.
Nokia reported a net loss of 1.07 billion euros ($1.4 billion), or 29 cents a share, because of a 1.1 billion-euro impairment loss on its location unit. Sales declined 21 percent to 10 billion euros.
Petropavlovsk, which mines gold and iron ore in Russia, rose 11 percent to 772 pence after setting a 680,000 ounce production target for 2012. Production in 2011 rose 24 percent to 630,100 ounce, the company said in a statement today.
A gauge of European banks gained 1.5 percent. National Bank of Greece SA rallied 18 percent to 2.41 euros. Raiffeisen Bank International AG (RBI) and Erste Group Bank AG (EBS) climbed 12 percent to 27.25 euros and 7.6 percent to 17.25 euros, respectively.
KBC Groep, EasyJet
KBC Groep NV (KBC) jumped 9.7 percent to 15.44 euros after De Tijd reported the Belgian lender is close to an agreement to sell its Polish banking unit Kredyt Bank. De Tijd said Spain’s Banco Santander SA is the most likely candidate for the takeover, De Tijd reported without saying where it got the information.
EasyJet Plc (EZJ), Europe’s second-biggest discount carrier, rose 10 percent to 445.5 pence after revenue jumped almost 17 percent to 763 million pounds ($1.2 billion) in the first quarter ended Dec. 31.
Logitech dropped 12 percent to 6.58 Swiss francs after cutting its forecasts for sales and operating income, citing a weaker euro and decreased demand for products such as web cameras and remote controls.
The company changed its sales forecast for the fiscal year ending March 31 to $2.3 billion, with operating income estimated at $60 million. Logitech, which also produces gaming devices, in September cut its forecast for full-year operating profit to about $90 million on sales of about $2.4 billion.
To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
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