European telecommunications stocks rose, led by Deutsche Telekom AG on speculation the region’s largest phone company may spin off its U.S. business. Deutsche Telekom gained the most in four months. Tele2 AB rallied to a four-week high after Morgan Stanley said the Swedish telecommunications provider was the “best restructuring story.”
STMicroelectronics NV climbed on plans to form a company with Intel Corp.
“Anything that potentially has got some corporate activity attached to it is doing well today,” said Andy Lynch, who helps manage about $11 billion at Schroder Investment Management in London. “There is a lot of speculation in the market and people really trying to chase the next big story.”
Drug stocks fell after brokerages downgraded GlaxoSmithKline PLC on concern its diabetes medicine may pose health risks and Novartis AG lost a ruling to block sales of a generic drug. The Dow Jones Stoxx 600 Health Care index fell to a one-month low. Marks & Spencer Group PLC slid after the retailer reported earnings that missed analysts’ estimates.
ASIAN STOCKS RALLY: Asian stocks rose to the highest in a week, led by bank and technology shares after Sumitomo Mitsui Financial Group Inc. and NEC Corp. forecast profit increases.
Sumitomo Mitsui, Japan’s No. 3 lender by assets, led gains among banks after saying loans became more profitable in the second half. Samsung Electronics Co. rose for the first time in six days after NEC predicted earnings will triple and Intel Corp. said demand for personal computers is “healthy.”
“Bank shares have been performing poorly for a long time, and optimism is building they’ll do better,” said Kazuya Nakamura, who helps oversee $10 billion of assets at Norinchukin Zenkyoren Asset Management Co. in Tokyo. “Electronics-makers’ profits are recovering and their earnings prospects for this year are brighter than expected.”
