European Stocks Advance Before German Confidence Report

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European stocks climbed, rebounding after two daily losses, as investors awaited data that may show German investor confidence rose for the first time this year. U.S. stock-index futures advanced, while Asian shares slipped.

Shire Plc gained 3.1 percent after a report said it has hired Citigroup Inc. as it may receive takeover offers. Whitbread Plc (WTB) added 3.6 percent after sales at its Premier Inn hotels and Costa Coffee chain topped analysts’ estimates. A gauge of automakers led gains after European car sales rose for a ninth consecutive month.

The Stoxx Europe 600 Index advanced 0.4 percent to 346.89 at 9:43 a.m. in London after closing at its lowest level since June 5 yesterday. Standard & Poor’s 500 Index futures climbed 0.3 percent, while the MSCI Asia Pacific Index lost 0.1 percent, falling for a fourth day.

A report at 11 a.m. in Mannheim may show that the ZEW Center for European Economic Research’s index of investor and analyst expectations rose to 35 in June from a 16-month low of 33.1 in May, according to the median economist forecast in a Bloomberg News survey. The gauge aims to predict economic developments six months in advance.

Separate data at 8:30 a.m. in Washington will probably show the number of new homes started in the U.S. dropped to a 1.03 million annualized rate in May from 1.07 million in April.

Federal Reserve policy makers start their two-day meeting today. The U.S. central bank will reduce its stimulatory asset-purchase program by $10 billion for a fifth straight month, bringing it to $35 billion, according to the median of 43 economists’ estimates compiled by Bloomberg.

Iraq Tension

European shares dropped for two days, sending the Stoxx 600 down 1.2 percent through yesterday from its six-year high on June 10, as Sunni insurgents made further territorial gains in Iraq and Russia cut supplies of gas to Ukraine. U.S. President Barack Obama is considering air strikes against Islamic militants in Iraq.

Shire rallied 3.1 percent to 3,647 pence. The pharmaceutical company has hired Citigroup as it may receive offers following spate of deals in the industry, Reuters reported, citing people familiar with the matter.

Whitbread rose 3.6 percent to 4,318 pence. Like-for-like sales at Premier Inn jumped 9.5 percent in the first quarter, topping analysts’ estimates that called for an increase of 7 percent. They rose 4.5 percent at Costa, exceeding projections of 4 percent.

Automakers Rise

Carmakers and auto-parts producers advanced 1.2 percent, the biggest gain out of 19 industry groups in the Stoxx 600. Car sales climbed 4.3 percent in May, with registrations increasing to 1.13 million vehicles from 1.09 million a year earlier, the European Automobile Manufacturers’ Association said.

Renault SA added 1.3 percent to 68.75 euros, while Daimler AG gained 1.8 percent to 70.26 euros.

Rheinmetall AG rose 3.3 percent to 51.29 euros. The German automotive and defense-equipment supplier was boosted to buy from hold at Berenberg Bank. Orders from international customers will bolster sales at the company’s defense division, while the automotive business will continue to benefit from growth in global auto production, according to Berenberg.

Ashtead Group Plc (AHT) dropped 4.3 percent to 849 pence. The U.K. building-equipment rental company reported full-year revenue of 1.6 billion pounds ($2.7 billion), matching analysts’ projections.

Commodity producers posted the largest drop out of 19 groups in the Stoxx 600 as prices for gold, silver and platinum slid. Fresnillo Plc retreated 1.9 percent to 806.5 pence, while Randgold Resources Ltd. lost 2 percent to 4,523 pence. Polymetal International Plc declined 2.5 percent to 530 pence.

Subsea 7 SA (SUBC) retreated 2.1 percent to 124.10 kroner. Berenberg cut the offshore oil services provider to hold from buy, saying its order backlog will decline after it lost project opportunities in West Africa to rivals in the past year. Natixis SA also cut its rating on the London-based company to neutral from buy.

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