EUROPEAN stocks closed higher last week as companies including BNP Paribas SA and European Aeronautic, Defence & Space Co reported earnings that beat analysts' estimates and investors speculated mergers and acquisitions are picking up.
BNP Paribas had its biggest weekly gain in a month as profit at France's largest bank declined less than projected. EADS rallied after posting record production rates at its Airbus SAS unit. BT Group Plc also climbed on earnings. BHP Billiton Ltd led an advance in basic-resources shares on speculation China may buy a stake in the world's largest mining company.
Europe's Dow Jones Stoxx 600 Index added 1.5 percent to 329.86, the highest since February 26 and trimming the decline this year to 9.5 percent. Concern that record oil prices, inflation and US$342 billion in credit losses will cut economic and profit growth has weighed on stocks.
"The earnings reports were important and one of the driving forces, as were commodities," said Carsten Klude head of investment strategy at M.M. Warburg & Co in Hamburg, adding that acquisitions were also buoying the market. "This topic seemed dead for some time but is now back on the agenda."
Faster growth
Germany's DAX Index added 2.2 percent. France's CAC 40 gained 2.4 percent. The UK's FTSE 100 advanced 1.6 percent. The Stoxx 50 also rallied 1.6 percent.
European economic growth accelerated more in the first quarter than economists estimated. Gross domestic product in the 15 euro countries added 0.7 percent from the fourth quarter, the European Union's statistics office said last week. Germany's 1.5 percent rise was more than double estimates.
"Economic growth was clearly above expectations, particularly in Germany, which gave the market a positive impulse," Joerg Laser, head of Hamburg-based Conrad Hinrich Donner Bank, said in a Bloomberg Television interview.
BNP Paribas added 3.8 percent. The bank posted a 21-percent drop in first-quarter profit on May 14, a smaller fall than analysts estimated, as France's largest bank dodged the worst of the subprime-mortgage market crash. Net income of 1.98 billion euros (US$3.08 billion) was above the 1.62-billion-euro median estimate of 11 analysts surveyed by Bloomberg News.
EADS jumped 8.8 percent. Europe's largest aerospace company reported net income of 285 million euros last week. Analysts had predicted a profit of 210 million euros.
BT Group rose 5.2 percent. The UK's biggest telco said earnings were 426 million pounds (US$833 million) in the quarter ended in March. BHP rallied 9.3 percent after a report said China wants to join a fund in Australia to buy a 9-percent stake.