ECONOMY

European stocks rebound after worst start to year since 2008

European stocks advanced following their longest weekly losing streak since October.

The Stoxx Europe 600 Index added 0.8 percent to 340.74 at 9:53 a.m. on Monday in London after earlier paring gains to 0.1 percent. The benchmark gauge fell 1 percent last week for a second decline, posting its worst start to a year since 2008. It closed down 3.7 percent from an almost seven-year high reached Dec. 5 amid a decline in oil prices and Greek equities as the nation is heading for an early election.

“Concerns about oil and Greece have given us a very volatile start to the year, though this was welcome for us,” said Michael Woischneck, who helps manage about $7.3 billion at Lampe Asset Management in Dusseldorf. “It’s an opportunity to pick up stocks. We increased our equity exposure quite significantly.”

The Stoxx 600 lost 1.3 percent on Jan. 9 amid a slump in Spanish and Italian lenders. The IBEX 35 Index fell the most since September 2012 that day, closing at its lowest level since Oct. 16. At the same time, traders are buying up protection should Greece’s potential exit from the euro trigger a domino drop in Spanish and Italian stocks.

The Spanish equity gauge and Italy’s FTSE MIB Index rose more than 1 percent today. Greece’s ASE Index advanced 0.7 percent. Germany’s DAX Index posted the biggest gain among 18 western-European markets, up 1.3 percent.

Equities ended lower on Jan. 9 after a person familiar with the matter said the European Central Bank is studying models for buying as much as 500 billion euros ($593 billion) of investment-grade assets, raising concern that won’t be enough to shore up the economy. Later in the day, a U.S. jobs report showed earnings for all employees unexpectedly declined.

Colchicine Drug

Among companies moving on corporate news, Hikma Pharmaceuticals Plc climbed 3.4 percent after saying it will distribute its colchicine drug in the U.S. as a court rejected Takeda Pharmaceutical Co.’s motion to block sales of the gout- flares treatment. Deutsche Lufthansa AG added 2.4 percent as it said jet fuel costs should slide by 900 million euros this year, or 13 percent, after falling an estimated 400 million euros in 2014.

Aer Lingus Group Plc fell 5 percent after International Consolidated Airlines Group SA, the owner of British Airways, said the Irish carrier rejected a sweetened bid. IAG SA gained 1.1 percent.

A gauge of energy stocks dropped a second day, limiting gains for the Stoxx 600. Drilling and services companies led losses, with Seadrill Ltd. sliding 5.2 percent to its lowest price since May 2009. SBM Offshore NV dropped 3.9 percent, and Technip SA declined 3.1 percent. Hunting Plc slumped 9.4 percent as Barclays Plc cut its rating on the stock.

[Bloomberg]