Energy Stocks Climb to 15 month

ArcelorMittal AdvancesDecember 28, 2009, 12:12 PM EST
By Adria Cimino

Dec. 28 (Bloomberg) -- European stocks climbed for a fourth day, sending the Dow Jones Stoxx 600 Index to its highest level in almost 15 months, after China raised its economic growth forecast and Japan’s industrial production increased.
ArcelorMittal, the world’s biggest steelmaker, and Norsk Hydro ASA led basic-resources companies higher as metals prices rose. OMV AG and Aker Solutions ASA gained more than 1 percent as crude oil traded above $78 a barrel. Vestas Wind Systems A/S, the world’s biggest maker of wind turbines, and Repower Systems AG rallied as China approved new rules to encourage the growth of renewable energy sources.

The Stoxx 600 added 0.5 percent to 253.17, the highest level since Oct. 3, 2008. The gauge is set for its biggest annual increase in a decade, having risen 28 percent this year, on mounting evidence that the global economy is recovering from its worst recession since World War II. China on Dec. 25 raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will also increase, narrowing the gap with Japan, the world’s second-biggest economy.

Emerging markets’ economies “will support global growth,” said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris, which oversees about $150 million. “That’s good for stocks. We expect another year of gains in 2010.”
Japan’s Cabinet Office said on Dec. 25 that the economy will expand for the first time in three years and today said industrial production improved for a ninth month in November.

U.S. Economy
A 60 percent rally in the Stoxx 600 since March has been spurred by record-low interest rates in the U.S. and Europe and as governments committed about $12 trillion worldwide to revive credit markets and stimulate economic growth.
National benchmark indexes rose in 13 of the 16 western European markets that were open today. Ireland and the U.K. were closed for holidays. France’s CAC 40 climbed 0.9 percent, while Germany’s DAX advanced 0.8 percent.

Metals Prices
ArcelorMittal rallied 2.4 percent to 32.05 euros. Norsk Hydro, Europe’s third-largest aluminum producer, increased 2.4 percent to 48.78 kroner. Boliden AB, the region’s second-biggest zinc producer, gained 1.5 percent to 91.2 kronor.
Basic-resources shares were the best performers among 19 industry groups in the Stoxx 600. Copper rose to its highest level in more than 15 months in New York on speculation that demand will strengthen and drain stockpiles.
OMV, central Europe’s largest oil company, climbed 1.1 percent to 30.29 euros. Aker Solutions, Norway’s biggest maker of oil platforms and equipment, advanced 1.3 percent to 76.40 kroner. Tenaris SA, the world’s largest maker of seamless pipes used to extract oil and gas, added 1.8 percent to 15.04 euros. Crude oil climbed for a fourth day as U.S. retail sales climbed over the holiday season.
Vestas, which is among companies expanding in China, increased 1.1 percent to 304.25 kroner. China’s National People’s Congress, the country’s legislature, on Dec. 26 approved new rules compelling the country’s grid operators to buy power generated from renewable energy sources including solar, wind and geothermal.

Renewable Energy
Repower, the German wind-turbine maker controlled by India’s Suzlon Energy Ltd., jumped 4.7 percent to 129.20 euros. Renewable Energy Corp. ASA, a Norwegian maker of solar energy components, rallied 2.9 percent to 43.70 kroner.
PSA Peugeot Citroen, Europe’s second-biggest carmaker, rose 1.5 percent to 23.82 euros. French new car sales increased by about 40 percent between Dec. 1 and Dec. 23, helped by scrapping incentives, French daily Les Echos reported, without citing anyone. By Christmas, December car sales in France reached 180,000, meaning that 2009 as a whole will show a gain of about 9 percent, according to the newspaper.
Areva SA dropped 1.8 percent to 344.40 euros after a group of French companies including Areva lost a $20 billion contract to build four nuclear plants it designed in the United Arab Emirates to a group of Korean companies.
MAN SE slipped 1.2 percent to 53.81 euros. Scania AB Chief Executive Officer Leif Oestling sees little potential for synergies in a tie-up with Europe’s third-largest truckmaker, Welt am Sonntag reported. He said it would be “unrealistic” to expect savings of 1 billion euros ($1.4 billion), or even 500 million euros, from a merger with MAN in the “short term,” the newspaper reported. Scania fell 0.2 percent to 93.20 kronor.
--With assistance from Julie Cruz in London. Editor: Christiane Lenzner
To contact the reporter on this story: Adria Cimino in Paris at +33-1-5530-6297 or acimino1@bloomberg.net.
To contact the editor responsible for this story: David Merritt at +44-20-7673-2639 or dmerritt1@bloomberg.net.