European Stocks Pare Advance as Deutsche Telekom Falls

European stocks pared their advance as telecommunications companies retreated, offsetting increased speculation that policy makers will do more to stimulate the economy after a report showed China’s inflation cooled. U.S. index futures were little changed, while Asian shares rose.
Nestle SA, which accounts for more than 3 percent of the Stoxx Europe 600 Index (SXXP), advanced 1.8 percent as higher prices helped increase the company’s revenue in Europe and the Americas. Deutsche Telekom AG (DTE) retreated 2.1 percent. Commerzbank AG (CBK) fell 3.9 percent after forecasting that net income in the second half will be lower than in the first half.

 

Deutsche Telekom AG retreated 2.1 percent. Photographer: Akos Stiller/Bloomberg

The Stoxx 600 added 0.1 percent to 269.34 at 9:31 a.m. in London, paring an earlier gain of as much as 0.5 percent. The gauge has rallied 15 percent since its 2012 low on June 4, with nine straight weeks of gains, as policy makers eased repayment terms for Spanish lenders and optimism grew that central banks will add more stimulus. Standard & Poor’s 500 Index futures decreased less than 0.1 percent today, while the MSCI Asia Pacific Index climbed 0.8 percent.
“For some time now, investors have feared that the Chinese economy was at risk of a hard landing, given the recent weakness in economic data,” said Michael Hewson, a market analyst at CMC Markets U.K. Plc. “This morning’s release of Chinese CPI data has reinforced speculation about further easing measures, given that inflation in July has continued its decline.”

Chinese Inflation

China’s consumer prices rose 1.8 percent from a year earlier, the National Bureau of Statistics said in Beijing. That compared with the 1.7 percent median forecast of 33 economists in a Bloomberg News survey and a 2.2 percent gain in June.
Slower consumer-price inflation may encourage policy makers to add further measures to reverse the economic slowdown. The leaders of the ruling Communist Party last week pledged to keep adjusting policies to ensure the economy expands at a stable rate this year.
Nestle SA (NESN) climbed 1.8 percent to 60.75 Swiss francs after the world’s largest food company said sales increased 6.6 percent, excluding acquisitions, divestments and currency shifts in the first half of the year. That beat the average estimate of 10 analysts in a Bloomberg survey for growth of 6.3 percent.

Source:Bloomberg,



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